Form 6252 miscalculation

[user17733491813]

Line 19, the gross profit percentage is using the wrong calculation.   On my  return it shows 100% profit when it should be 89%.  I compared it to an installment sale in 2017 and the IRS form has changed since then but the Turbotax calculation didn't change.  

The big problem is the form is treating the entire gain as reportable in 2025.  Turbotax in Line 22 has me add line 20 +21 (contract price + installment payment). 

Line 20 ( the gross profit) is being entered, which is recognizing the full gain.  

This is the first year of the sale so the line 20 says " If this is the year of the sale, enter the amount from line 17. Otherwise, enter 0" .   I think I need to enter 0 to have it calculate correctly.     I could really use some help!

[AmyC]

The way depreciation is handled changed. Now, any section 1245 or 1250 gains must be recognized in the year of sale. All of your depreciation is hitting you this year, instead of being spread out as it was in the past.

If the home was fully depreciated, that is a big hit for this year.

Key lines:

Line 5 - selling price - total value

Line 16 is the gross profit.

Line 18 contract price

Line 19 profit % - verify your numbers on lines 16 and 18

Line 20 - Form 6252 instructions state: If this is the year of sale, enter the amount from line 17. Really, for the rest of the calculations. Do not enter zero.

Line 21 - verify the payments you received  towards principal in 2025 only

Line 24 -actual income for this year to be taxed.

[user17733491813]

Thanks for replying.  This sale has no depreciation.  It is the sale of a business.  This is how it is showing up on my TurboTax form 6252

Line 5 - Selling price - total value , Say $100,000

Line 16- Gross profit   $90,000

Line 18 - Contract price - The same a sell price in this case  $100,000

Line 19 profit %  Turbotax says 1.0  even though it is really .90

Line A1  Install made  $15,000

A2  Interest  $5,000

Line 21  $15,000

Line 22    $105,000   ( it is adding gross profit and installment payment)

Line 24  $105,000  

This problem is corrected if I answer differently in the TurboTax step by step questions.  If I input  the sale date of 12.31.2024 instead of 1.1.25  it gives my an installment payment of $15,000.

Help!  What am I doing wrong?    I really appreciate your help!

[user17733491813]

This business sale does not include any buildings, and nothing has been depreciated as far as build-out of the rental or inventory.  Section 1245 and 1250 wouldn't apply, would they?

Why is TurboTax  inputting the entire sale instead of the installment? (see my previous comments)

[AmyC]

You mention inventory. Sale of inventory is 100% taxable in the year of sale. Goodwill sold is eligible for installment sale. Entering the wrong date may fix it but it isn't valid. Take a look:

• Check your asset classifications - no inventory or depreciated property
• Look for the recapture question - how much prior depreciation was taken? That goes to line 20
• Look at the asset entry worksheet to see where the software is pulling the recapture data from.

 To print or view  your forms, including all worksheets:

• In desktop, switch to Forms Mode. 
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now.