Sole Proprietor - Schedule C - sold building using Installment Sale - question about where to claim gain Form 4797 or Sch D

[taxesohmy2017]

In 2021, I sold my commercial building that I used for my CNC shop to an individual not in the same industry.  We agreed to Installment Sale.  I am entering the information on Form 6252.  My first question is - will I report Part II line 26 which will be my taxable income on Schedule D or Form 4797.  It gives me two options to choose from and there is big difference on the balance.  I currently have it being report on Form 4797 where it appears on Part I line 4 Section 1231 gain from Installment Sales from Form 6252.   Is this correct?  When I have the amount appear on this line my balance due is $59,487.00. If I report it on schedule D my balance due drops down to $34,245.00.  A big difference in balance due. 

On my Form 6252. I filled in the following lines:

line 5 Selling Price: $900K

line 7: Subtract 6 from 5: $900K

line 8: Cost or other basis of property sold: $393751.00

line 9 Depreciation allowed or allowable: $256240.00

line 10: Adjusted basis: $137511.00

line 11: Commissions and other expenses: $35510.00

line 12: Income recapture from Form 4797 Part III - $0.00

line 13 Add lines 10,11,12: $173021.00

Line 14 Subtract line 13 from line 5: $726979

Line 16: Gross Profit: $726979.00

Line 18: Contract Price: $900K

Part II

line 19: gross profit %: 0.80775

line 21: Payments received: $377896.00

line 22: add line 20 and 21: $377896.00

line 24: Installment sale income: $305245.00

line 26: Subtract line 25 from line 24. Enter amt on Sch D or Form 4797: $305245

Not sure where to enter line 26. 

Second question: Also from reading the publications, it says the seller must recognize all recapture income in the year of a sale, up to the total amount of gain realized.  Am I doing that with amount listed on Line 26 $305245.00

On my depreciation module when I selected disposed of building. I left the sell price $0 and said do not carry to form 4797.  I entered the sale directly on the Form 6252 as listed above - is that the correct way? Because if I enter the sale price and select to carry to Form 4797 to Part III Section 1250 and enter the info on form 6252 its adding $900K my taxable income on top of the $305245 from line 26 on Form 6252. Or should enter 0 for sale Price and yes to carry to Form 4797 Part III showing cost basis and depreciation leaving out the $900K on the sell price line so the IRS sees the building listed as disposed

Any guidance would be greatly appreciated.

[PatriciaV]

We recommend using the Step-by-Step guidance in TurboTax Home & Business when entering an installment sale. This interview will capture all relevant information and report the amounts on the correct forms and link the sale to the proper activity Schedule. This includes Form 4797, which is needed to calculate depreciation recapture (if any). You can always review the results in Forms Mode to confirm the outcome.

Note that gain on an installment sale is recognized each year based on the amount of principal payment you received. If the buyer paid you 30% of the principal, for instance, you would then report 30% of the gain.