6252 Installment Sale Income

Form

6252

Department of the Treasury
Internal Revenue Service

Installment Sale Income
▶ Use

7
8
9
10
11
12
13
14
15
16
17
18

20
21
22
23
24
25
26

Yes

No

Yes

No

Gross Profit and Contract Price. Complete this part for all years of the installment agreement.
5

13
14
15
16
17
18

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

Gross profit percentage (expressed as a decimal amount). Divide line 16 by line 18. (For years after
the year of sale, see instructions.) . . . . . . . . . . . . . . . . . . . . . . .
If this is the year of sale, enter the amount from line 17. Otherwise, enter -0- . . . . . . . . .
Payments received during year (see instructions). Don’t include interest, whether stated or unstated .
Add lines 20 and 21 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments received in prior years (see instructions). Don’t include interest,
whether stated or unstated . . . . . . . . . . . . . . . . .
23
Installment sale income. Multiply line 22 by line 19 . . . . . . . . . . . . . . . . .
Enter the part of line 24 that is ordinary income under the recapture rules. See instructions . . . .
Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797. See instructions
. . .

Part III
27

Identifying number

Selling price including mortgages and other debts. Don’t include interest, whether stated or unstated
Mortgages, debts, and other liabilities the buyer assumed or took the property
subject to (see instructions) . . . . . . . . . . . . . . . . .
6
Subtract line 6 from line 5 . . . . . . . . . . . . . . . . .
7
Cost or other basis of property sold . . . . . . . . . . . . . .
8
Depreciation allowed or allowable . . . . . . . . . . . . . . .
9
Adjusted basis. Subtract line 9 from line 8 . . . . . . . . . . . .
10
Commissions and other expenses of sale . . . . . . . . . . . .
11
Income recapture from Form 4797, Part III (see instructions) . . . . . .
12
Add lines 10, 11, and 12 . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 13 from line 5. If zero or less, don’t complete the rest of this form. See instructions . .
If the property described on line 1 above was your main home, enter the amount of your excluded
gain. See instructions. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . .
Gross profit. Subtract line 15 from line 14 . . . . . . . . . . . . . . . . . . . .
Subtract line 13 from line 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . .
Contract price. Add line 7 and line 17 . . . . . . . . . . . . . . . . . . . . .

Part II
19

Attachment
Sequence No. 67

Description of property ▶
Date acquired (mm/dd/yyyy) ▶
b Date sold (mm/dd/yyyy) ▶
Was the property sold to a related party (see instructions) after May 14, 1980? If “No,” skip line 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 . . . . . . . . . . . . . . . .

Part I
5
6

2021

▶ Attach to your tax return.
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.

Name(s) shown on return

1
2a
3
4

OMB No. 1545-0228

19
20
21
22

24
25
26

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

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

28
29

Yes
No
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
a
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)

Page 2

Form 6252 (2021)

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.

Page 3

Form 6252 (2021)

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.

Page 4

Form 6252 (2021)

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.