installment sale with second downpmt

[GeorgeHeim]

I sold a business in 2015 with both equipment and land.

There was a down pmt and a subsequent installment sale.

All equipment transferred on the original date but the land was held back pending a second down payment  which happened in 2023.

How do I add the new amounts into the existing installment sale

[PatriciaV]

Since you have another downpayment for a different asset, you may report this as a separate installment sale. Adjust the length of the repayment period if needed.

Enter this transaction under Sale of Business Property, which is found under the Income topic.

[GeorgeHeim]

small problem... the way the sale was structured, the second down payment  was for less than the basis in the land... so it creates a net loss and then generates a $3000 adj. to income which will play out over a very long time even though the note will be paid of before that.

]can I amend the original installment loan to increase the amount of the loan and pick up the current year payments against that note?

[DianeW777]

A loss is not allowed to be reported on the installment method.  The land, although 'held back' as far as transferring the assets, does  not affect the installment sale that it is a part of for reporting purposes.  

Two Points for you to consider:

1. Correct the installment sale to include the land, OR
2. Report the land sale separately, which is how it appears you set it up initially, fully reportable in 2023, when it occurred.

The land then would be a 'Sale of Business Property' without using the installment method.

@GeorgeHeim