Discussion:Question??? What Form

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Discussion Forum Index --> Consumer Questions --> Question??? What Form


Skyhorse1 (talk|edits) said:

8 February 2007
I sold some property (4.5 Acres) in 2004. It was financed on a 30 year term so the payments would be low. It had a 24 month pay off period. In other words he paid me for 2 years with installment payments. In 2006 he paid the property off. My question is What forms Do I use in reporting this to the IRS. I used form 6252 Installment Sale Income in 2004 when I sold the land. Skyhorse1 22:30, 7 February 2007 (CST)

Deback (talk|edits) said:

February 8, 2007
You should have also used Form 6252 (and Sch D) in 2005 to include the 2005 principal payments. Use 6252 to show the final principal payment in 2006 and transfer the gain to Sch D.

Skyhorse1 (talk|edits) said:

10 February 2007
Hi Deback, Thank you for taking a little of your valuable time to help me with my Question.

I used form 6252 Installment Sale Income in 2004 when I sold the land. I also reported it on schedule D. But for some reason I did not report it in 2005 on form 6252 and schedule D. I just reported the interest earned on schedule B. I do not know if it would make a difference (with the IRS it might) because I did not earn enough to use my itemized deductions and went with the standard deduction. My adjusted gross income was only $1200.00 on Line 38…Skyhorse1 14:24, 10 February 2007 (CST)

Death&Taxes (talk|edits) said:

10 February 2007
But the principal payments had to be reported on Form 6252, and multiplied by the profit percentage. While there may not have been any tax, the balancue due on principal would be reduced. I would not amend but I would do the calculation.

Deback (talk|edits) said:

February 10, 2007
I agree with D&T, if your AGI was only $1,200. Figure out what should have been reported on Form 6252 in 2005 and reduce the principal balance that hasn't been reported by that amount. I'm not sure if your State return would need to be amended for 2005....depends on the State's exemption amount and the amount of taxable principal that didn't get reported in 2005.

Deback (talk|edits) said:

February 10, 2007
Whether to amend the 2005 federal or not depends on the taxable principal amount that should have been reported on Form 6252 in 2005.

Skyhorse1 (talk|edits) said:

10 February 2007
Live in Texas, No state returns. The Amount would have been $230.Skyhorse1 15:06, 10 February 2007 (CST)

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