Instructions For Form 6252 (Page 2 of 2) in pdf

other than this creditor or someone related

a schedule showing the computation of

form, do not include it on this line. Instead,

to the creditor.

gain. Enter the taxable part on line 24 and

enter it on line 23.

also on line 35 if Part III applies. See

See Pledge Rule on page 1 for details

Interest on Deferred Tax

Temporary Regulations section 15A.453.

about proceeds that must be treated as

Line 6—Mortgages and other debts.—

payments on installment obligations.

Generally, interest must be paid on the

Enter only mortgages or other debts the

deferred tax related to any obligation that

Line 23—Payments received in prior

buyer assumed from the seller or took the

arises during a tax year from the

years.—Enter all money and the fair

property subject to. Do not include new

disposition of property under the

market value of property you received

mortgages the buyer gets from a bank, the

installment method if:

before 1992 from the sale. Include

seller, or other sources.

The property had a sales price over

allocable installment income and any other

Line 8—Cost or other basis of property

deemed payments from prior years.

$150,000 AND

sold.—Enter the original cost and other

Line 25.—Report on this line any ordinary

The aggregate balance of all nondealer

expenses you incurred in buying the

income recapture on section 1252, 1254,

installment obligations arising during, and

property. Add the cost of improvements,

or 1255 property. This includes recapture

outstanding at the close of, the tax year is

etc., and subtract any casualty losses

for the year of sale or any remaining

more than $5 million.

previously allowed. For more details, get

recapture from a prior year sale. Do not

Interest must be paid in subsequent

Pub. 551, Basis of Assets.

enter ordinary income from a section 179

years if installment obligations, which

expense deduction. If this is the year of

Line 9—Depreciation allowed or

originally required interest to be paid, are

allowable.—Enter all depreciation or

sale, see the instructions for Part IV of

still outstanding at the close of a tax year.

amortization you deducted or should have

Form 4797.

These rules do not apply to dispositions

deducted from the date of purchase until

Also report on this line any ordinary

of:

the date of sale. Add any section 179

income recapture remaining from prior

Farm property,

expense deduction you took and the

years on section 1245 or 1250 property

downward basis adjustment under section

Personal use property by an individual,

sold before June 7, 1984.

50(c) or the corresponding provision of

Real property in tax years beginning

Do not enter on line 25 more than the

prior law, if any. Subtract any investment

before 1988, or

amount shown on line 24.

tax credit recapture amount if the basis of

Personal property before 1989.

Line 26—Trade or business property.—

the property was reduced under section

Enter this amount on Form 4797, line 4, if

50(c) or the corresponding provision of

How To Report the Interest.—The

the property was held more than 1 year. If

prior law and any section 179 or 280F

interest is not figured on Form 6252. See

the property was held 1 year or less, or if

recapture amount included in gross income

section 453A to figure the interest. Enter

you have an ordinary gain from a

in a prior tax year. Do not include on this

the interest as an additional tax on your

noncapital asset (even if the holding period

line any section 179 expense deduction for

tax return. Include it in the amount to be

is more than 1 year) enter this amount on

a partnership or an S corporation that

entered on the total tax line after credits

Form 4797, line 11, and write “From Form

passed through the deduction to its

and other taxes. For individuals, this is line

6252.”

partners or shareholders.

53 of the 1992 Form 1040. For

corporations, it is line 10 of Schedule J

Capital assets.—Enter this amount on

Line 11—Commissions and other

(Form 1120). Write “Section 453A(c)

Schedule D as a short-term or long-term

expenses of sale.—Enter sales

interest” to the left of the amount.

gain. Use the lines identified as from Form

commissions, advertising expenses,

6252.

attorney and legal fees, etc., in selling the

Corporations may deduct the interest in

property.

the year it is paid or accrued. For

Part III—Related Party Installment

individuals and other taxpayers, this

Line 12—Ordinary income recapture.—

Sale Income

interest is not deductible.

Enter here and on Form 4797, line 14, the

part of the gain from the sale of

Line 29.—If one of the exceptions apply,

Additional Information

depreciable property recaptured under

check the appropriate box. Skip lines 30

section 1245 or 1250 (including sections

through 37. If you checked box 29e, attach

See Pub. 537 for details about reductions

179 and 291). See the instructions for

an explanation. Generally, the nontax

in selling price, the single sale of several

Parts III and IV of Form 4797 to figure the

avoidance exception will apply to the

assets, like-kind exchanges, dispositions of

recapture. Do not include on this line any

second disposition if:

installment obligations, and repossessions.

section 179 expense deduction for a

The disposition was involuntary (e.g., a

partnership or an S corporation that

creditor of the related person foreclosed

passed through the deduction to its

on the property, or the related person

Specific Instructions

partners or shareholders.

declared bankruptcy), or

If this is the year of sale and you sold

The disposition was an installment sale

Part II—Installment Sale Income

section 1245, 1250, 1252, 1254, or 1255

under which the terms of payment were

Line 19—Gross profit percentage.—

property, you may have ordinary income.

substantially equal to or longer than those

Enter the gross profit percentage

Complete Part III of Form 4797 to figure

for the first sale. However, the resale terms

determined for the year of sale even if you

the ordinary income. Also, see the

must not permit significant deferral of

did not file Form 6252 for that year.

instructions for Part IV of Form 4797

recognition of gain from the first sale (e.g.,

Line 21—Payments received during

before starting Part I of Form 6252.

amounts from the resale are being

year.—Enter all money and the fair market

collected sooner).

Part I—Gross Profit and Contract

value of any property you received in 1992.

Line 30.—If the related party sold all or

Include as payments any amount withheld

Price

part of the property from the original sale

to pay off a mortgage or other debt, such

Line 5—Selling price.—Enter the total of

in 1992, enter the selling price of the part

as broker and legal fees. Do not include

any money, face amount of the installment

resold. If part was sold in an earlier year

the buyer’s note, any mortgage, or other

obligation, and the fair market value of

and part was sold this year, enter the

liability assumed by the buyer. If you did

other property that you received or will

cumulative amount of the selling price.

not receive any payments in 1992, enter

receive in exchange for the property sold.

Line 36.—See the instructions for line 25,

zero.

Include on line 5 any existing mortgage or

above. Do not enter on line 36 more than

If in prior years an amount was entered

other debt the buyer assumed or took the

the amount shown on line 35.

on the equivalent of line 32 of the 1992

property subject to.

Line 37.—See the instructions for line 26,

If there is no stated maximum selling

above.

price, such as in a contingent sale, attach

Page 2

Instructions For Form 6252 Page 2

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