I’m trying to determine how to classify some incom...
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New Member

I’m trying to determine how to classify some income. I sold some items to a business to aide in the start up. There’s a down payment of 4000.00 and monthly payments that include interest.

How to i report the down payment and interest i received correctly.?
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Expert Alumni

I’m trying to determine how to classify some income. I sold some items to a business to aide in the start up. There’s a down payment of 4000.00 and monthly payments that include interest.

  

Use the following steps to enter the details of your sale as an installment sale:

  • On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
  • This opens a box where you can type in “installment sales” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
  • The search results will give you an option to “Jump to installment sales
  • Click on the blue “Jump to installment sales” link
  • On the page "Any Other Property Sales" check the box for: "Sales of real estate, cars, or anything else for which you receive payments over two or more tax years (installment sales)" and click Continue
  • On the Installment Sales page answer yes to "Do you want to report an installment sale?"
  • Continue through the interview and record the details of your Installment Sale

 

@rickpoole1645

  

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New Member

I’m trying to determine how to classify some income. I sold some items to a business to aide in the start up. There’s a down payment of 4000.00 and monthly payments that include interest.

Thank you for the direction. I suspected that this was the correct way. Point of clarification: I loaned this company 90 grand on a 25 month note. So what I need to show is the down payment amount plus the interest that was paid to me during the 2019 calendar year. That still fits this scenerio? I obviously don’t want to be taxed on the money that I loaned simply being paid back. Just the money considered profit aka interest and down pmt. 

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Expert Alumni

I’m trying to determine how to classify some income. I sold some items to a business to aide in the start up. There’s a down payment of 4000.00 and monthly payments that include interest.

It sounds like you do not have an installment sale, just a loan.

 

If that is the case, just report the interest.

 

Normally on a loan, there is no down payment.  If the 'down payment' is points, or some kind of advanced interest, you just report it as interest.

 

Payments of principal are not reportable.

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