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.

OMB No. 1545-0228

2009

Attachment 

Sequence No. 79

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 the year of sale only.

5 Selling price including mortgages and other debts. Do not 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, do not 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 the year of sale and any year you receive a payment or have 

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

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). Do not include interest, whether stated or unstated 21 

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

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

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 2009 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 (2009)
Form 6252 (2009) Page 2 

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise noted.

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 for sales that do 

not 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, or the Schedule D for your tax 

return, whichever applies.

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 can 

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, also complete Part 

III.

Later Years

Complete lines 1 through 4 and Part II 

for any year in which you receive a 

payment from an installment sale.

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.

After December 31, 1986, the 

installment method is not available for 

the sale of marketable securities.

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.

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. Do not 

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 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.

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 cannot report 

the sale using the installment method. 

For this purpose, depreciable property is 

any property that can be depreciated by 

a person or entity to whom you transfer 

it. However, you can 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.

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 cannot 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 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 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.

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
Form 6252 (2009) Page 3 

● 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 do not apply to 

dispositions of:

● Farm property,

● Personal use property by an individual,

● Real property before 1988, or

● Personal property before 1989.

See IRC 453(l) for more information on 

the sale of timeshares and residential 

lots under the installment method.

How to report the interest. The

interest is not figured on Form 6252. See 

Pub. 537, Installment Sales, for details 

on how to report the interest.

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

Line 5

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. Do not 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 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.

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.

● Section 179 expense.

● Commercial revitalization deduction.

● 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, etc., 

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. 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. Partnerships and S corporations 

and their partners and shareholders, see 

the Instructions for Form 4797.

Line 14

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.

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 

(expressed as a decimal amount) 

determined for the year of sale even if 

you did not file Form 6252 for that year.

Line 21

Enter all money and the FMV of any 

property you received in 2009. Include 

as payments any amount withheld to pay 

off a mortgage or other debt or to pay 

broker and legal fees. Generally, do not 

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 in 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 did not receive any payments in 

2009, enter zero. If in prior years an 

amount was entered on the equivalent of 

line 32 of the 2009 form, do not include it 

on this line. 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.
Form 6252 (2009) Page 4 

Line 23

Enter all money and the FMV of property 

you received before 2009 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. 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.

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 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

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 2009, 

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 2009 from the sale. 

Include allocable installment income and 

any other deemed payments from prior 

years. Do not include interest, whether 

stated or unstated.

Line 36

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.

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.