Sale of Farm and Farm Assets in an Installment Sale

[tmickel]

In 2020, I sold my farm land (non-depreciable) and farm equipment and improvements that are either fully or partially depreciated. It is an installment sale. I have allocated the FMV of each asset that has been depreciated and they are all independently entered on Form 4797.  The aggregate gain from all the depreciable assets  (Form 4797, Line 13) is $142,113. How does this amount get transfered to Form 6252, Installment Sale Income? I may be going about this wrong. 

[Critter-3]

First ... even if you are holding payments on the sold items you can enter the full sale this year on the form 4797 and only the interest in future years.  So review the return as it stands and see if this may be an option you would like to take.  SAVE the return under a specific file name so you can return to it later if you choose this option later.

Now you did everything correct up to the point where the program asks if you sold this as an installment sale ... edit your assets and say YES for each of them. 

It may be easier to either do this in the FORMS mode  or   indicate that all of the assets were taken out of service to stop any depreciation  and then make one entry in the 6252 section ...

[tmickel]

• The step by step did not ask me if it was part of an installment sale. Maybe because I did not create the firm before I entered the asset was sold. Once I created that 6252, I was able to connected through forms. But it is showing up as an error. I may need to regress to a return where I have not entered any disposition information. Interesting idea to do away with all the depreciable assets in the first year. This is a 2020 amended return. So I don't think the IRS would allow the change. Thanks for your response. 

[Critter-3]

Not sure what you mean ... they were all sold in 2020 so you can amend to not use the installment option.  After the year of sale you will only visit the 6252 section to enter in the principle and interest collected.  

And you really need to complete the program interview in the order it is presented or you may not be presented the screens you need when you need them ... for all Sch C/E/F forms business info >>> income >>> expenses >>> assets is the path to take.

And you have the option to save the return as a PDF  as you go along with unique file names such as "Sch C", "Sch C with assets", "assets sold", "installment completed" etc ... so you can always restore from a prior point  in case you mess up a section and need to start the return again from a prior saved point.

This is my mini version of  a tutorial  that should be in the downloaded program: 

 

What is Forms Mode?

Forms Mode lets you view and make changes to your tax forms "behind the scenes."

If you're adventurous, you can even prepare your return in Forms Mode, but we don't recommend it. You may miss obscure credits and deductions you qualify for, and you may forget to report things that will come back and haunt you later.

Forms Mode is exclusively available in the TurboTax CD/Download software. It is not available in TurboTax Online.

Related Information:

• Why would I use Forms Mode?
• How do I switch to Forms Mode in the TurboTax for Windows software?
• How do I switch to Forms Mode in the TurboTax for Mac software?
• What is-the-meaning-of-all-the-different-colors-in-forms-mode
• How to delete a form

If you want to play around with different figures and tax scenarios without affecting your original return you can ….

• >>>In the TurboTax CD/Download software by creating a test copy: 
• 1.  Open your return in TurboTax. 
• 2.  From the File menu, choose Save As. 
• 3.  Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name). 
• 4. Click  Save. You are now safely working in the test copy and anything you do here will not affect the original. 
•  https://ttlc.intuit.com/questions/1900642-how-to-make-a-test-copy-of-your-return

• >>  use the WHAT IF tool: 
• - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view) 
• - Click on the Open Form Icon 
• - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form 
• - You will see the worksheet on the right side of the screen; enter the information right into the form 
• - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

Once you have filed successfully … you can shut off the auto updater function and then save the return &  .taxfile.

It's always a good idea to make a backup copy of your tax data file, in case your original gets lost or corrupted. Here's how:

1. From the File menu in the upper-left corner of TurboTax, choose Save As (Windows) or Save (Mac).
2. Browse to where you want to save your backup.
   • Tip: If you're saving to a portable device, save it to your computer first to prevent data corruption. Then, after completing Step 4, copy or move the backup file to your device.
3. In the File name field, enter a name that will distinguish it from the original tax file (for example, add "Backup" or "Copy" to the file name)
4. Click Save and then close TurboTax.
5. Restart TurboTax and open the backup copy to make sure it's not corrupted. If you get an error, delete the backup and repeat these steps.

If you make changes to your original tax return file, repeat these steps to ensure your original and backup copies are in-synch.

Related Information:                             

• Retrieve a Tax File from a Portable Device
• What's the difference between the tax data file and the PDF file?

AND save it as a PDF so you have access to a copy even if you don’t have the program still installed and operational :

• How do I save my return as a PDF in the TurboTax software for Windows?
• How do I save my return as a PDF in the TurboTax software for Mac?

AND protect the files :

• How can I protect the tax files on my computer?

*** Other clues to the downloaded program ***

In the forms mode ... double click  or right click on a box on a form to data source it ... sadly it doesn't work on all boxes. 

What's the meaning of all the different colors in Forms Mode?

When you look at an onscreen tax form using Forms Mode, you might wonder why one figure is blue and the one next to it is red or black.

These colors indicate the source of that data.

Color	Meaning
Blue	You entered this data, either in the interview or Forms Mode.
Black	The program entered this data or calculated this amount.
Red	This data has either been overridden or is invalid (for example, a ZIP code that doesn't exist).
Red italics	You marked this amount as estimated.
Black italics	The program calculated this amount from an amount you marked as estimated.
Purple	This information has supporting details.
Aquamarine	This data was transferred over from last year.
Green	This data was imported from Quicken or QuickBooks.
Yellow fields (Windows)	Yellow fields allow user input. Anything you enter here shows up in blue.