I assume that the "equity" does not involve publicly traded stock and that you have a profit on the sale.
Generally, this will be reported using the Installment Sales interview. Assuming that this is a partnership or S-Corp situation you'll want to wait until you receive your Schedule K-1 information as that information will affect your basis, and the profit.
If the payout schedule does not explicitly provide for an "interest" element - and it sounds like it doesn't - then you must impute a portion of each year's payment as "interest", reported as interest income. (IRS statement:)
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If the installment
sales contract does not provide for adequate stated interest, part
of the stated principal may be recharacterized as unstated interest
or original issue discount for tax purposes, even if you have a loss.
You must use the applicable federal rate (AFR) to figure the amount
of stated principal recharacterized as unstated interest or original
issue discount. The AFRs are published monthly in the Index
of Applicable Federal Rates (AFR) Rulings.
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This might be a good year to not try and "go it alone" for preparing your income tax return but, instead, getting some competent local professional help.
Tom Young
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