OMB No. 1545-0228 Installment Sale Income

Form 6252  Attach to your tax return.

Department of the Treasury

Internal Revenue Service

 Use a separate form for each sale or other disposition of

property on the installment method.

Attachment

Sequence No. 79

Name(s) shown on return Identifying number

Description of property 

Date acquired (month, day, year)  / / Date sold (month, day, year) 

Was the property sold to a related party (see instructions) after May 14, 1980? If “No,” skip line 4 Yes No

Was the property you sold to a related party a marketable security? If “Yes,” complete Part III. If “No,”

complete Part III for the year of sale and the 2 years after the year of sale Yes No

Gross Profit and Contract Price. Complete this part for the year of sale only.

1

Selling price including mortgages and other debts. Do not include interest whether stated or unstated

Mortgages, debts, and other liabilities the buyer assumed or took

the property subject to (see instructions)

2a

3

Subtract line 6 from line 5

4

Cost or other basis of property sold

5 5

Depreciation allowed or allowable

6

6

Adjusted basis. Subtract line 9 from line 8

7 7

Commissions and other expenses of sale

8 8

Income recapture from Form 4797, Part III (see instructions)

9 9

Add lines 10, 11, and 12

10 10

Subtract line 13 from line 5. If zero or less, do not complete the rest of this form (see instructions)

11

If the property described on line 1 above was your main home, enter the amount of your excluded

gain (see instructions). Otherwise, enter -0-

11

12

Gross profit. Subtract line 15 from line 14

12

13

Subtract line 13 from line 6. If zero or less, enter -0-

13

Contract price. Add line 7 and line 17

14 14

Installment Sale Income. Complete this part for the year of sale and any year you receive a payment or

have certain debts you must treat as a payment on installment obligations.

15

Gross profit percentage. Divide line 16 by line 18. For years after the year of sale, see instructions

15

16

If this is the year of sale, enter the amount from line 17. Otherwise, enter -0-

16

17

Payments received during year (see instructions). Do not include interest, whether stated or unstated

17

18

Add lines 20 and 21

18

Payments received in prior years (see instructions). Do not include

interest, whether stated or unstated

19 19

20

Installment sale income. Multiply line 22 by line 19

20

21

Enter the part of line 24 that is ordinary income under the recapture rules (see instructions)

21

Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797 (see instructions)

22 22

Related Party Installment Sale Income. Do not complete if you received the final payment this tax year.

Name, address, and taxpayer identifying number of related party

Did the related party resell or dispose of the property (“second disposition”) during this tax year?

If the answer to question 28 is “Yes,” complete lines 30 through 37 below unless one of the following conditions is

met. Check the box that applies.

The second disposition was more than 2 years after the first disposition (other than dispositions

of marketable securities). If this box is checked, enter the date of disposition (month, day, year)  / /

The first disposition was a sale or exchange of stock to the issuing corporation.

The second disposition was an involuntary conversion and the threat of conversion occurred after the first disposition.

The second disposition occurred after the death of the original seller or buyer.

It can be established to the satisfaction of the Internal Revenue Service that tax avoidance was not a principal purpose

for either of the dispositions. If this box is checked, attach an explanation (see instructions).

23

Selling price of property sold by related party

23

24 24

Enter contract price from line 18 for year of first sale

25 25

Enter the smaller of line 30 or line 31

26 26

Total payments received by the end of your 2003 tax year (see instructions)

27

Subtract line 33 from line 32. If zero or less, enter -0-

28

Multiply line 34 by the gross profit percentage on line 19 for year of first sale

29

Enter the part of line 35 that is ordinary income under the recapture rules (see instructions)

30

Subtract line 36 from line 35. Enter here and on Schedule D or Form 4797 (see instructions)

30

For Paperwork Reduction Act Notice, see page 4. Form 6252 (2003)

Part II

Part I

Part III

Yes No

Cat. No. 13601R

b

a

b

c

d

e

31

32

33

34

35

36

37

31

32

33

34

35

36

37

/ /

2003
Form 6252 (2003) Page 2

General Instructions

Purpose of Form

Generally, use Form 6252 to report

income from casual sales during this

tax year of real or personal property

(other than inventory) if you will

receive any payments in a tax year

after the year of sale. For years after

the year of an installment sale, see

Which Parts To Complete below.

Do not file Form 6252 to report

sales during the tax year of stock or

securities traded on an established

securities market. Instead, treat all

payments as received during this tax

year.

Do not file Form 6252 if you elect

not to report the sale on the

installment method. To elect out,

report the full amount of the gain on a

timely filed return (including

extensions) on Form 4797 or the

Schedule D for your tax return,

whichever applies. If you filed your

original return on time without making

the election, you may make the

election on an amended return filed no

later than 6 months after the due date

of your tax return, excluding

extensions. Write “Filed pursuant to

section 301.9100-2” at the top of the

amended return.

Which Parts To Complete

Year of Sale

Complete lines 1 through 4, Part I,

and Part II. If you sold property to a

related party during the year, complete

Part III.

Special Rules

If any part of an installment payment

you received is for interest, report that

interest on the appropriate form or

schedule. Do not report interest

received, carrying charges received, or

unstated interest on Form 6252. See

Pub. 537, Installment Sales, for details

on unstated interest.

A special rule applies to a first

disposition (sale or exchange) of

property under the installment method

to a related party who then makes a

second disposition (sale, exchange,

gift, or cancellation of installment note)

before making all payments on the

first disposition. For this purpose, a

related party includes your spouse,

child, grandchild, parent, brother,

sister, or a related corporation, S

corporation, partnership, estate, or

trust. See section 453(f)(1) for more

details.

Under this rule, treat part or all of

the amount the related party realized

(or the fair market value (FMV) if the

disposed property is not sold or

exchanged) from the second

disposition as if you received it from

the first disposition at the time of the

second disposition. Figure the gain, if

any, on lines 30 through 37. This rule

does not apply if any of the conditions

listed on line 29 are met.

Generally, if you sell depreciable

property to a related person (as

defined in section 453(g)(3)), you may

For certain dispositions under the

installment method, if an installment

obligation is pledged as security on a

debt, the net proceeds of the secured

debt are treated as payment on the

installment obligation. However, the

amount treated as payment may not

exceed the excess of the total

installment contract price over any

payments received under the contract

before the secured debt was obtained.

An installment obligation is pledged

as security on a debt to the extent

that payment of principal and interest

on the debt is directly secured by an

interest in the installment obligation.

For sales after December 16, 1999,

payment on a debt is treated as

directly secured by an interest in an

installment obligation to the extent an

arrangement allows you to satisfy all

or part of the debt with the installment

obligation.

The pledge rule applies to any

installment sale with a sales price of

over $150,000 of:

● Any property disposed of after 1988

(except personal use property

disposed of by an individual and farm

property) and

● Real property used in a trade or

business or held for the production of

rental income, for pledges made after

December 17, 1987.

However, the pledge rule does not

apply to pledges made after

December 17, 1987, if the debt is

incurred to refinance the principal

amount of a debt that was

outstanding on December 17, 1987,

and was secured by nondealer real

property installment obligations on

that date and at all times after that

date until the refinancing. This

exception does not apply to the

Section references are to the Internal

Revenue Code unless otherwise

noted.

Do not file Form 6252 for sales that

result in a loss, even if you will receive

a payment in a tax year after the year

of sale. Instead, report the entire sale

on Form 4797, Sales of Business

Property, or the Schedule D for your

tax return, whichever applies.

Later Years

Complete lines 1 through 4 and Part II

for any year in which you receive a

payment from an installment sale.

Interest

Installment Sales to Related Party

Sale of Depreciable Property to

Related Person

Pledge Rule

If you sold a marketable security to

a related party after May 14, 1980,

and before January 1, 1987, complete

Form 6252 for each year of the

installment agreement, even if you did

not receive a payment. Complete lines

1 through 4. Complete Part II for any

year in which you receive a payment

from the sale. Complete Part III unless

you received the final payment during

the tax year.

If you sold property other than a

marketable security to a related party

after May 14, 1980, complete Form

6252 for the year of sale and for 2

years after the year of sale, even if

you did not receive a payment.

Complete lines 1 through 4. Complete

Part II for any year during this 2-year

period in which you receive a payment

from the sale. Complete Part III for the

2 years after the year of sale unless

you received the final payment during

the tax year.

A Change To Note

The Jobs and Growth Tax Relief

Reconciliation Act of 2003 reduced

the capital gains rates for

noncorporate taxpayers for sales,

exchanges, or conversions of assets

(including installment payments

received) after May 5, 2003.

not report the sale using the

installment method. For this purpose,

depreciable property is any property

that may be depreciated by the

person or entity to whom you transfer

it. However, you may use the

installment method if you can show to

the satisfaction of the IRS that

avoidance of Federal income taxes

was not one of the principal purposes

of the sale (for example, no significant

tax deferral benefits will result from

the sale). If the installment method

does not apply, report the sale on

Schedule D or Form 4797, whichever

applies. Treat all payments you will

receive as if they were received in the

year of sale. Use FMV for any

payment that is contingent as to

amount. If the FMV cannot be readily

determined, basis is recovered ratably.
Form 6252 (2003) Page 3

How to report the interest. The

interest is not figured on Form 6252.

See section 453A to figure the

interest. Enter the interest as an

additional tax on your tax return.

Include it in the amount to be entered

on the total tax line after credits and

other taxes. For individuals, this is line

60 of the 2003 Form 1040. For

corporations, it is line 11 of Schedule

J (Form 1120). Write “Section 453A(c)

interest” to the left of the amount.

Corporations may deduct the

interest in the year it is paid or

accrued. For individuals and other

taxpayers, this interest is not

deductible.

Additional Information

See Pub. 537 for additional

information, including details about

reductions in selling price, the single

sale of several assets, like-kind

exchanges, dispositions of installment

obligations, and repossessions.

Specific Instructions

Part I—Gross Profit and

Contract Price

Enter the total of any money, face

amount of the installment obligation,

and the FMV of other property that

you received or will receive in

exchange for the property sold.

Include on line 5 any existing

mortgage or other debt the buyer

assumed or took the property subject

to.

If there is no stated maximum

selling price, such as in a contingent

sale, attach a schedule showing the

computation of gain. Enter the taxable

part on line 24 and also on line 35 if

Part III applies. See Temporary

Regulations section 15A.453-1.

Enter only mortgages or other debts

the buyer assumed from the seller or

took the property subject to. Do not

include new mortgages the buyer gets

from a bank, the seller, or other

sources.

Enter the original cost and other

expenses you incurred in buying the

property. Add the cost of

improvements, etc., and subtract any

diesel-powered highway vehicle,

enhanced oil recovery, disabled

access, new markets, or

employer-provided child care credit or

casualty losses previously allowed. For

details, see Pub. 551, Basis of Assets.

Enter all depreciation or amortization

you deducted or were allowed to

deduct from the date of purchase until

the date of sale. Add any section 179

expense deduction; the downward

basis adjustment under section 50(c)

(or the corresponding provision of

prior law); the deduction for qualified

clean-fuel vehicle property or refueling

property; deductions claimed under

section 190, 193, or 1253(d)(2) or (3)

(as in effect before the enactment of

P.L. 103-66); and the basis reduction

for the qualified electric vehicle credit.

Subtract any investment tax credit

recapture amount if the basis of the

property was reduced under section

50(c) (or the corresponding provision

of prior law); any section 179 or 280F

recapture amount included in gross

income in a prior tax year; any

qualified clean-fuel vehicle property or

Enter sales commissions, advertising

expenses, attorney and legal fees,

etc., incurred to sell the property.

Any ordinary income recapture under

section 1245 or 1250 (including

sections 179 and 291) is fully taxable

in the year of sale even if no

payments were received. To figure the

recapture amount, complete Form

4797, Part III. The ordinary income

recapture is the amount on line 31 of

Form 4797. Enter it on line 12 of Form

6252 and also on line 13 of Form

4797. Do not enter any gain for this

property on line 32 of Form 4797. If

you used Form 4797 only to figure the

recapture amount on line 12 of Form

6252, enter “N/A” on line 32 of Form

4797.

If the property described on line 1 was

your main home, you may be able to

exclude part or all of your gain. See

Pub. 523, Selling Your Home, for

details.

Part II—Installment Sale

Income

Enter the gross profit percentage

determined for the year of sale even if

you did not file Form 6252 for that

year.

Enter all money and the FMV of any

property you received in 2003. Include

as payments any amount withheld to

pay off a mortgage or other debt or to

pay broker and legal fees. Do not

include the buyer’s note or any

mortgage or other liability assumed by

the buyer. If you did not receive any

payments in 2003, enter zero. If in

prior years an amount was entered on

the equivalent of line 32 of the 2003

form, do not include it on this line.

Line 5

Line 6

Line 8

Line 9

Line 11

Line 12

Line 14

Line 15

Line 19

Line 21

Generally, interest must be paid on

the deferred tax related to any

obligation that arises during a tax year

from the disposition of property under

the installment method if:

● The property had a sales price over

$150,000 and

● The aggregate balance of all

nondealer installment obligations

arising during, and outstanding at the

close of, the tax year is more than $5

million.

Interest must be paid in subsequent

years if installment obligations that

originally required interest to be paid

are still outstanding at the close of a

tax year.

The interest rules do not apply to

dispositions of:

● Farm property,

● Personal use property by an

individual,

● Real property in tax years beginning

before 1988, or

● Personal property before 1989.

Interest on Deferred Tax

Do not file Form 6252 if line 14 is zero

or less. Instead, report the entire sale

on Form 4797 or the Schedule D for

your tax return.

extent that the principal amount of the

debt resulting from the refinancing

exceeds the principal amount of the

refinanced debt immediately before

the refinancing. Also, the pledge rule

does not affect refinancing due to the

calling of a debt by the creditor if the

debt is then refinanced by a person

other than this creditor or someone

related to the creditor.

refueling property deduction you were

required to recapture because the

property ceased to be eligible for the

deduction; any recapture of the

employer-provided child care facilities

and services credit; and any basis

increase for qualified electric vehicle

recapture.
Form 6252 (2003) Page 4

The time needed to complete and

file this form will vary depending on

individual circumstances. The

estimated average time is:

Recordkeeping 1 hr., 18 min.

Learning about the law

or the form 24 min.

Preparing the form 1 hr.

If you have comments concerning

the accuracy of these time estimates

or suggestions for making this form

simpler, we would be happy to hear

from you. See the instructions for the

tax return with which this form is filed.

Paperwork Reduction Act Notice.

We ask for the information on this

form to carry out the Internal Revenue

laws of the United States. You are

required to give us the information.

We need it to ensure that you are

complying with these laws and to

allow us to figure and collect the right

amount of tax.

You are not required to provide the

information requested on a form that

is subject to the Paperwork Reduction

Act unless the form displays a valid

OMB control number. Books or

records relating to a form or its

instructions must be retained as long

as their contents may become

material in the administration of any

Internal Revenue law. Generally, tax

returns and return information are

confidential, as required by section

6103.

Copying, assembling, and

sending the form

to the IRS 20 min.

If the related party sold all or part of

the property from the original sale in

2003, enter the resale price of the part

resold. If part was sold in an earlier

year and part was sold this year, enter

the cumulative amount of the resale

price.

If you completed Part II, enter the sum

of lines 22 and 23. Otherwise, enter all

money and the FMV of property you

received before 2003 from the sale.

Include allocable installment income

and any other deemed payments from

prior years. Do not include interest,

whether stated or unstated.

See the instructions for line 25. Do

not enter on line 36 more than the

amount shown on line 35. Any excess

must be reported in future years on

Form 6252 up to the taxable part of

the installment sale until all of the

recapture has been reported.

See the instructions for line 26.

Enter here and on Form 4797, line 15,

any ordinary income recapture on

section 1252, 1254, or 1255 property

for the year of sale or all remaining

recapture from a prior year sale. Do

not enter ordinary income from a

section 179 expense deduction. If this

is the year of sale, complete Form

4797, Part III. The amount from line

27c, 28b, or 29b of Form 4797 is the

ordinary income recapture. Do not

enter any gain for this property on line

31 or 32 of Form 4797. If you used

Form 4797 only to figure the recapture

on line 25 or 36 of Form 6252, enter

“N/A” on lines 31 and 32 of Form

4797.

Also report on this line any ordinary

income recapture remaining from prior

years on section 1245 or 1250

property sold before June 7, 1984.

Do not enter on line 25 more than

the amount shown on line 24. Any

excess must be reported in future

years on Form 6252 up to the taxable

part of the installment sale until all of

the recapture has been reported.

For trade or business property held

more than 1 year, enter this amount

on Form 4797, line 4, column (g), and

if applicable, column (h). If the

property was held 1 year or less or

you have an ordinary gain from the

sale of a noncapital asset (even if the

holding period is more than 1 year),

enter this amount on Form 4797, line

10, and write “From Form 6252.” If the

property was section 1250 property

(generally, real property that you

depreciated) held more than 1 year,

figure the total amount of

unrecaptured section 1250 gain

included on line 26 using the

Unrecaptured Section 1250 Gain

Worksheet in the Instructions for

Schedule D (Form 1040).

For capital assets, enter this amount

on Schedule D as a short- or

long-term gain on the lines identified

as from Form 6252.

Part III—Related Party

Installment Sale Income

If one of the conditions is met, check

the appropriate box and skip lines 30

through 37. If you checked box 29e,

attach an explanation. Generally, the

nontax avoidance exception will apply

to the second disposition if:

● The disposition was involuntary (for

example, a creditor of the related

party foreclosed on the property or the

related party declared bankruptcy) or

● The disposition was an installment

sale under which the terms of

payment were substantially equal to or

longer than those for the first sale.

However, the resale terms must not

permit significant deferral of

recognition of gain from the first sale

(for example, amounts from the resale

are being collected sooner).

Line 25

Line 26

Line 29

Line 30

Line 33

Line 36

Line 37

Enter all money and the FMV of

property you received before 2003

from the sale. Include allocable

installment income and any other

deemed payments from prior years.

Line 23

Instead, enter it on line 23. See

Pledge rule on page 2 for details

about proceeds of debt secured by

installment obligations that must be

treated as payments on installment

obligations. Figure the amount to enter in the

Post-May 5 column of Form 4797 or

Schedule D by multiplying this amount

by a fraction, the numerator of which

is the amount of payments received

after May 5, 2003 and the

denominator of which is the total

amount of payments received for the

year.