Form 6252

Department of the Treasury 

Internal Revenue Service

Installment Sale Income

▶ Attach to your tax return.

▶ Use a separate form for each sale or other disposition of property on the installment method.

▶ Go to www.irs.gov/Form6252 for the latest information.

OMB No. 1545-0228

2021

Attachment 

Sequence No. 67

Name(s) shown on return Identifying number

1 Description of property ▶ 

2 a Date acquired (mm/dd/yyyy) ▶ b Date sold (mm/dd/yyyy) ▶

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

4 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

Part I Gross Profit and Contract Price. Complete this part for all years of the installment agreement. 

5 Selling price including mortgages and other debts. Don’t include interest, whether stated or unstated 5 

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

subject to (see instructions) . . . . . . . . . . . . . . . . . 6 

7 Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . 7 

8 Cost or other basis of property sold . . . . . . . . . . . . . . 8 

9 Depreciation allowed or allowable . . . . . . . . . . . . . . . 9 

10 Adjusted basis. Subtract line 9 from line 8 . . . . . . . . . . . . 10 

11 Commissions and other expenses of sale . . . . . . . . . . . . 11 

12 Income recapture from Form 4797, Part III (see instructions) . . . . . . 12 

13 Add lines 10, 11, and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

14 Subtract line 13 from line 5. If zero or less, don’t complete the rest of this form. See instructions . . 14 

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

gain. See instructions. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . 15 

16 Gross profit. Subtract line 15 from line 14 . . . . . . . . . . . . . . . . . . . . 16 

17 Subtract line 13 from line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . 17 

18 Contract price. Add line 7 and line 17 . . . . . . . . . . . . . . . . . . . . . 18 

Part II Installment Sale Income. Complete this part for all years of the installment agreement. 

19 Gross profit percentage (expressed as a decimal amount). Divide line 16 by line 18. (For years after 

the year of sale, see instructions.) . . . . . . . . . . . . . . . . . . . . . . . 19 

20 If this is the year of sale, enter the amount from line 17. Otherwise, enter -0- . . . . . . . . . 20 

21 Payments received during year (see instructions). Don’t include interest, whether stated or unstated . 21 

22 Add lines 20 and 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 

23 Payments received in prior years (see instructions). Don’t include interest, 

whether stated or unstated . . . . . . . . . . . . . . . . . 23 

24 Installment sale income. Multiply line 22 by line 19 . . . . . . . . . . . . . . . . . 24 

25 Enter the part of line 24 that is ordinary income under the recapture rules. See instructions . . . . 25 

26 Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797. See instructions . . . 26 

Part III Related Party Installment Sale Income. Don’t complete if you received the final payment this tax year.

27 Name, address, and taxpayer identifying number of related party ▶

28 Did the related party resell or dispose of the property (“second disposition”) during this tax year? . . . . Yes No

29 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.

a 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 (mm/dd/yyyy) . . . . . . . . . . . . ▶

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

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

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

e It can be established to the satisfaction of the IRS that tax avoidance wasn’t a principal purpose for either of the dispositions. 

If this box is checked, attach an explanation. See instructions.

30 Selling price of property sold by related party (see instructions) . . . . . . . . . . . . . 30 

31 Enter contract price from line 18 for year of first sale . . . . . . . . . . . . . . . . 31

 32 Enter the smaller of line 30 or line 31 . . . . . . . . . . . . . . . . . . . . . 32

 33 Total payments received by the end of your 2021 tax year (see instructions) . . . . . . . . . 33

 34 Subtract line 33 from line 32. If zero or less, enter -0- . . . . . . . . . . . . . . . . 34

 35 Multiply line 34 by the gross profit percentage on line 19 for year of first sale . . . . . . . . 35

 36 Enter the part of line 35 that is ordinary income under the recapture rules. See instructions . . . . 36

 37 Subtract line 36 from line 35. Enter here and on Schedule D or Form 4797. See instructions . . . 37

For Paperwork Reduction Act Notice, see page 4. Cat. No. 13601R Form 6252 (2021)
Form 6252 (2021) Page 2

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise noted.

Future Developments

For the latest information about 

developments related to Form 6252 and its 

instructions, such as legislation enacted 

after they were published, go to 

www.irs.gov/Form6252.

What’s New

Installment sale reporting. In 2021 and 

later, if you have an outstanding installment 

sale balance after the initial year, complete 

lines 1 through 4, Part I, and Part II for each 

year of the installment agreement. If you 

sold property to a related party during the 

year, also complete Part III.

Qualified Opportunity Investment. If you 

held a qualified investment in a qualified 

opportunity fund (QOF) at any time during 

the year, you must file your return with 

Form 8997, Initial and Annual Statement of 

Qualified Opportunity Fund (QOF) 

Investments, attached. See the Form 8997 

instructions.

Purpose of Form

Use Form 6252 to report income from an 

installment sale on the installment method. 

Generally, an installment sale is a 

disposition of property where at least one 

payment is received after the end of the tax 

year in which the disposition occurs. 

Ordinarily, an installment sale doesn’t 

include a disposition of personal property 

by a person who regularly sells or 

otherwise disposes of personal property of 

the same type, or a disposition of real 

property that is held by the taxpayer for 

sale to customers in the ordinary course of 

the taxpayer’s trade or business. However, 

gain on some dispositions by dealers in 

real property or farmers who dispose of 

any property used or produced in the trade 

or business of farming may be reported on 

the installment method.

Don’t file Form 6252 for sales that don’t 

result in a gain, 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; Form 

8949, Sales and Other Dispositions of 

Capital Assets; or the Schedule D for your 

tax return, whichever applies.

Don’t 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 the year of sale.

Don’t 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, Form 8949, or 

the Schedule D for your tax return, 

whichever applies. If you filed your original 

return on time without making the election, 

you can make the election on an amended 

return filed no later than 6 months after the

due date of your tax return, excluding 

extensions. Enter “Filed pursuant to 

section 301.9100-2” at the top of the 

amended return.

Which Parts To Complete

For All Years

Complete lines 1 through 4, Part I, and Part 

II. If the property was sold to a related 

party, also complete Part III. Complete 

these requirements for Form 6252 for each 

year of the installment agreement, 

including the year of final payment, even if 

a payment wasn’t received during the year.

If you sold a marketable security to a 

related party after May 14, 1980, and 

before 1987, complete Form 6252 for each 

year of the installment agreement, even if 

you didn’t receive a payment. Complete 

lines 1 through 4. Complete Part III unless 

you received the final payment during the 

tax year.

After 1986, the installment method isn’t 

available for the sale of marketable 

securities.

Note: 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 didn’t 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.

Special Rules

Interest

If any part of an installment payment you 

received is for interest or original issue 

discount, report that income on the 

appropriate form or schedule. Don’t report 

interest received, carrying charges 

received, or unstated interest on Form 

6252. See Pub. 537, Installment Sales, for 

details on unstated interest.

Installment Sales to Related Party

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 isn’t 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 doesn’t 

apply if any of the conditions listed on line 

29 are met.

Sale of Depreciable Property to 

Related Person

Generally, if you sell depreciable property 

to a related person (as defined in section 

453(g)(3)), you can’t report the sale using 

the installment method. For this purpose, 

depreciable property is any property that 

(in the hands of the person or entity to 

whom you transfer it) is subject to the 

allowance for depreciation. However, you 

can use the installment method if you can 

show to the satisfaction of the IRS that 

avoidance of federal income taxes wasn’t 

one of the principal purposes of the sale 

(for example, no significant tax deferral 

benefits will result from the sale). If the 

installment method doesn’t apply, report 

the sale on Form 4797, Form 8949, or 

Schedule D, 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 can’t be readily 

determined, basis is recovered ratably.

Pledge Rule

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 can’t be more than 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 after 1988 with a sales 

price of over $150,000 except:

• Personal use property disposed of by an 

individual,

• Farm property, and

• Timeshares and residential lots.

However, the pledge rule doesn’t 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 installment 

obligations on that date and at all times 

after that date until the refinancing. This 

exception doesn’t apply to the 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 doesn’t 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.
Form 6252 (2021) Page 3

Interest on Deferred Tax

Generally, you must pay interest 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.

You must pay interest 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 don’t apply to 

dispositions of:

• Farm property,

• Personal use property by an individual,

• Real property before 1988, or

• Personal property before 1989.

See section 453(l) for more information 

on the sale of timeshares and residential 

lots under the installment method.

How to report the interest. The interest 

isn’t figured on Form 6252. See Pub. 537 

for details and an example on how to 

report the interest under section 453A.

Capital Gains

If you have a capital gain, you can invest 

that gain into a QOF and elect to defer part 

or all of the gain that you would otherwise 

include in income. The gain is deferred until 

you sell or exchange the investment, you 

experience an inclusion event with respect 

to the investment, or December 31, 2026, 

whichever is earlier. You may also be able 

to permanently exclude gain from the sale 

or exchange of an investment in a QOF if 

the investment is held for at least 10 years. 

For information about what types of gains 

entitle you to elect these special rules, see 

the Instructions for Schedule D. Report the 

eligible gain on the form and in the manner 

otherwise instructed. See the Form 8949 

instructions on how to report your election 

to defer eligible gains invested in a QOF. If 

you held a qualified investment in a QOF at 

any time during the year, you must file your 

return with Form 8997, Initial and Annual 

Statement of Qualified Opportunity Fund 

(QOF) Investments, attached. See the Form 

8997 instructions.

Additional Information

See Pub. 537 for additional information, 

including details about reductions in selling 

price, the single sale of several assets, likekind exchanges, dispositions of installment 

obligations, and repossessions.

Specific Instructions

Part I—Gross Profit and 

Contract Price

Line 1

Enter a code from the list below and 

describe the installment sale property.

Code:

1. Sale property is timeshare or 

residential lot.

2. Sale by an individual of personal use 

property (within the meaning of 

section 1275(b)(3)). 

3. Sale of any property used or produced 

in the trade or business of farming 

(within the meaning of section 

2032A(e)(4) or (5)).

4. All other installment sales not listed.

Line 5

Enter the total of any money, face amount 

of the installment obligation, and the FMV 

of other property or services 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. Don’t 

include stated interest, unstated interest, 

any amount recomputed or recharacterized 

as interest, or original issue discount.

If there is no stated maximum selling 

price, such as in a contingent payment 

sale, attach a schedule showing the 

computation of gain. Enter the taxable part 

of the payment on line 24 and also on line 

35 if Part III applies. See Temporary 

Regulations section 15A.453-1.

Line 6

Enter only mortgages, debts, or other 

liabilities the buyer assumed from the seller 

or took the property subject to. Don’t 

include new mortgages the buyer gets from 

a bank, the seller, or other sources.

Line 8

Enter the original cost and other expenses 

you incurred in buying the property. Add 

the cost of improvements, etc., and 

subtract any casualty losses and any of the 

following credits previously allowed with 

respect to the property. 

• Nonbusiness energy property credit.

• Residential energy efficient property 

credit.

• Adoption credit.

• District of Columbia first-time homebuyer 

credit.

• Disabled access credit.

• New markets credit.

• Credit for employer-provided childcare 

facilities and services.

• Energy efficient home credit.

• Alternative motor vehicle credit.

• Alternative fuel vehicle refueling property 

credit.

• Qualified railroad track maintenance 

credit.

• Enhanced oil recovery credit.

• Qualified plug-in electric drive motor 

vehicle credit. 

• Qualified plug-in electric vehicle credit.

• Qualified electric vehicle credit.

For additional information, see Pub. 551, 

Basis of Assets.

Line 9

Enter all depreciation or amortization you 

deducted or were allowed to deduct from 

the date of purchase until the date of sale. 

Adjust the depreciation or amortization 

amount by adding any of the following 

deductions previously taken with respect to 

the property.

• Commercial revitalization deduction.

• Section 179 expense.

• Deduction for clean-fuel vehicles and 

refueling property.

• Deductions claimed under sections 190 

and 193.

• Deductions claimed under section 

1253(d)(2) and (3) (as in effect before 

enactment of P.L. 103-66).

• Basis reduction to investment credit 

property.

Subtract the following recapture 

amounts and credits previously allowed 

with respect to the property. 

• Section 179 or 280F.

• Clean-fuel vehicles and refueling 

property.

• Investment credit amount.

• Credit for employer-provided childcare 

facilities and services.

• Alternative motor vehicle credit.

• Alternative fuel vehicle refueling property 

credit.

• Qualified plug-in electric drive motor 

vehicle credit.

• Qualified plug-in electric vehicle credit.

• Qualified electric vehicle credit.

Line 11

Enter sales commissions, advertising 

expenses, attorney and legal fees, and 

other selling expenses incurred to sell the 

property.

Line 12

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. Don’t 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. Partnerships and S corporations and 

their partners and shareholders, see the 

Instructions for Form 4797.
Form 6252 (2021) Page 4

Line 14

Don’t file Form 6252 if line 14 is zero or 

less. Instead, report the entire sale on Form 

4797, Form 8949, or the Schedule D for 

your tax return.

Line 15

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

Line 19

Enter the gross profit percentage 

determined for the year of sale even if you 

didn’t file Form 6252 for that year. Enter it 

as a decimal rounded to at least 4 digits, 

and include all zeros (for example, 

25% = 0.2500, 35.25% = 0.3525, or 

100% = 1.0000).

Line 21

Enter all money and the FMV of any 

property or services you received in 2021. 

Include as payments any amount withheld 

to pay off a mortgage or other debt or to 

pay broker and legal fees. Generally, don’t 

include as a payment the buyer’s note, a 

mortgage, or other debt assumed by the 

buyer. However, a note or other debt that 

is payable on demand or readily tradable 

on an established securities market is 

considered a payment. For sales occurring 

before October 22, 2004, a note or other 

debt is considered a payment only if it was 

issued by a corporation or governmental 

entity. If you didn’t receive any payments in 

2021, enter zero. If in prior years an 

amount was entered on the equivalent of 

line 34 of the 2021 form, don’t include it on 

this line. Instead, enter it on line 23. See

Pledge Rule, earlier, for details about 

proceeds of debt secured by installment 

obligations that must be treated as 

payments on installment obligations.

Line 23

Enter all money and the FMV of property or 

services you received before 2021 from the 

sale. Include allocable installment income 

and any other deemed payments from prior 

years.

Deemed payments include amounts 

deemed received because of:

• A second disposition by a related party, 

or

• The pledge rule of section 453A(d).

Line 25

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. Don’t 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. Don’t 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.

Don’t 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.

Line 26

For trade or business property held more 

than 1 year, enter this amount on Form 

4797, line 4. 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 

enter “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

Line 29

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 30

If the related party sold all or part of the 

property from the original sale in 2021, 

enter the amount realized from the part 

resold. If part was sold in an earlier year 

and part was sold this year, enter the 

cumulative amount realized from the resale.

Amount realized. The amount realized

from a sale or exchange is the total of all 

money received plus the FMV of all

property or services received. The amount 

realized also includes any liabilities that 

were assumed by the buyer and any 

liabilities to which the property transferred 

is subject, such as real estate taxes or a 

mortgage. For details, see Pub. 544, Sales 

and Other Dispositions of Assets.

Line 33

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 2021 from the sale. Include 

allocable installment income and any other 

deemed payments from prior years. Don’t 

include interest, whether stated or 

unstated.

Line 36

See the instructions for line 25. Don’t 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.

Line 37

See the instructions for line 26.

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.

The time needed to complete and file 

this form will vary depending on individual 

circumstances. The estimated burden for 

individual taxpayers filing this form is 

approved under OMB control number 

1545-0074 and is included in the estimates 

shown in the instructions for their individual 

income tax return. The estimated burden 

for all other taxpayers who file this form is 

shown below.

Recordkeeping . . . . 1 hr., 18 min.

Learning about the law 

or the form . . . . . . . 24 min.

Preparing the form . . . . . . 1 hr.

Copying, assembling, and 

sending the form to the IRS . . 20 min.

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.