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jtdavis75
New Member

Taxability of Installment Sale Payments

Receiving installment payments on rental real estate sold at a gain and owner financed.   

 

Amounts from forms 4797 and 6252 are ultimately being reported on form 1040, line 8, Other Income From Schedule 1, line 10.

 

Then, I believe I am being taxed at ordinary rates on this long term capital gain installment income, rather than the preferred lower capital rates.  

 

Unclear as to how to correct this in turbo tax.

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1 Reply
Hal_Al
Level 15

Taxability of Installment Sale Payments

The Depreciation recapture portion, of the gain, is taxed at the ordinary income  rate, but not more than 25%.  It is a "section 1250 gain". 

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