Installment Sale of Rental Property
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Redan54
Level 2

Installment Sale of Rental Property

Sold on 11/15/2019, last payment won't be until 11/15/2022.

I read a couple of conflicting posts about this. Just making sure I understood correctly, do I put YES on any of these sections?

 

A) During the rental section where it asks if this was sold in 2019.

B) During the asset depreciation where it says "The item was sold, retired, stolen, destroyed, disposed of, converted to personal use, traded in, or given away (or it's no longer being used in this business for some other reason)"

 

Or do I put No for all these questions coz I remember reading on I think the page where A) is on about if it's on an installment sale, then it won't be considered sold until the final year & not to enter it in this section. So everything regarding the sale is to be entered into the Installment Sale section and for Sale of Business Property whatever section or and not anywhere else in the Rental interview section, right?

 

Unless the part where it says "not to enter it in this section" didn't mean the whole Rental section but just meant in the A) page/section but still mark it as sold later in the B) section... therefore would it be

No in A) Section, then Yes for the B) section and not enter in anything on the page for: "Sales Information - Enter the following information about the sale of this asset. You must divide, allocate the sales price and expenses between the land and the asset (improvement) based on their fair market values." coz it's not 2022?

 

For the Sale of Business Property section, do I checkmark off both A) Sales of business or rental property that you haven't reported and B) Sales of real estate, cars, or anything else for which you receive payments over 2 or more tax years? Or do I checkmark just B) coz I'm finally on the page that I can report it?

 

3 Replies
RobertG
Expert Alumni

Installment Sale of Rental Property

You should indicate that it was sold in the rental section.

 

You will then be prompted to enter the sale later, and indicate that it is an installment sale.

 

If you enter the sale in the rental section, don't enter it again in the sale of business property section, or it will be reported twice.

 

 

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Anonymous
Not applicable

Installment Sale of Rental Property

gain is reported pro-rata in each year you receive principal payments.   if no interest is specified on the payments you may be subject to the imputed interest rules under IRC 483 or 1274.  if so, then under the law part of those payments will be treated as interest.  you'll need to read IRS PUB 537 - start at page 10

https://www.irs.gov/pub/irs-pdf/p537.pdf

   

Redan54
Level 2

Installment Sale of Rental Property

i mean it seems like I should indicate that it was sold in 2019 within the rental section, but the problem is the rental screen for "Do Any of These Situations Apply to This Property?" has the option for "I sold or disposed of this property in 2019" but it actually says in the Learn More note area: "Check this box if the entire interest in this property was disposed of in a fully taxable transaction
....
Do not check this box if the disposition was reported using the installment method, until the final year of payment.
If this box is checked, losses are not limited by the passive activity rules."

 

LOL ummm what?!?

 

So is the correct way to do this is pretend I still own everything... and then later on in the Installment sales section, it asks if this is in regards to any of the properties I've already mentioned and to link back to what I've already listed... and then list the sales info there in Installment sales section instead?

I'm asking for clarification coz https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/trying-to-report-an-i... it says "UPDATED FOR TAX YEAR 2019

Only report the sale as an installment sale [NOT in the Schedule E interview]." ??? Does that mean we just pretend we still own it in during the Rental section? (Am I understanding this right lol)

 

Sorry this is just confusing...like what is the difference where we indicate it was sold at, in the Rental section or the Sale of Business Property or Installment Sales area...and we only pick 1 of the areas to enter in the info then?

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