Form 6252: Installment Sale Income

AAA

DEFINITION of 'Form 6252: Installment Sale Income'

A tax form distributed by the Internal Revenue Service (IRS) that is used to report income from a sale of real or personal property coming from an installment sale. Proceeds from an installment sale can come in later tax years, which are reported unless the taxpayer is not using the installment method.

INVESTOPEDIA EXPLAINS 'Form 6252: Installment Sale Income'

Income from the sale of a depreciable property that is sold to a related party is not allowed to be reported using the installment method unless the seller can prove that the purpose of the sale was not an avoidance of income tax.


Taxpayers do not have to file Form 6252 if the sale results in no gain, even if payments are received in a subsequent tax year. If this is the case, a business should report the sale using Form 4797.

RELATED TERMS
  1. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  2. IRS Publication 537

    A document published by the Internal Revenue Service (IRS) that ...
  3. Sale

    1) In general, a transaction between two parties where the buyer ...
  4. Installment Sale

    A method of sale that allows for partial deferral of any capital ...
  5. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  6. Section 7702

    The section of the United States Internal Revenue Code that defines ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Taxes

    Avoiding A Big Tax Bill On Real Estate Gains

    Installment sales allow sellers to defer taxes on real estate profits.
  2. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  3. Taxes

    An Overview Of Itemized Deductions

    Not taking the standard deduction this year could save you hundreds of dollars.
  4. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  5. Taxes

    How To Cut Your Alternative Minimum Tax

    Save yourself money by lowering the amount of tax you owe.
  6. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  7. Taxes

    10 Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  8. Taxes

    Which Is Better? Tax Preparer Or Tax Software

    Every taxpayer – and every year – is different, so here are four factors to help you decide whether a tax pro or software is best for you.
  9. Taxes

    7 Commonly Overlooked Tax Deductions

    Don't pay more taxes than you have to because you've missed taking legitimate tax deductions. Here are just a few you may have overlooked.
  10. Taxes

    Taxes: H&R Block Vs. TurboTax Vs. Jackson Hewitt

    There are more and more tax services to help ease the pain of filing income taxes. Here's our take on three of the biggest.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center