Federal Installment Sale Income

Installment Sale Income
2023 Form 6252
Form

6252

Department of the Treasury
Internal Revenue Service

Installment Sale Income

4

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

20
21
22
23
24
25
26

Yes
Yes

No
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. If “Yes,” complete Part III for the year of sale and 2
years after the year of the sale unless you received the final payment during the tax year
. . . . . . .
Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part I
5
6

2023

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.

Name(s) shown on return

1
2a
3

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

Did the related party resell or dispose of the property (“second disposition”) during this tax year? . . . . .
Yes
No
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 2023 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 (2023)

Page 2

Form 6252 (2023)

General Instructions

Which Parts To Complete

Pledge Rule

Section references are to the Internal Revenue
Code unless otherwise noted.

For All Years

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.

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 2023 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 for the year of sale and
2 years after the year of the sale unless you
received the final payment during the tax year.
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.

Complete lines 1 through 4, Part I, and Part II.
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.
Note: If the property was sold to a related
party, also complete Part III for the year of
sale and 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 for the tax year
the interest or original issue discount is
includible in your income. Don’t report interest
received, carrying charges received, original
issue discount, or unstated interest on Form
6252. See Pub. 537, Installment Sales, for
details on unstated interest and original issue
discount.

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, or sibling; 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.

Interest on Deferred Tax
Generally, you must pay interest on the
deferred tax related to any obligation,
including contingent obligations, 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, including contingent
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.

Page 3

Form 6252 (2023)

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 (Form 1040).
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 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, the 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 a contingent payment sale with a
stated maximum selling price, the stated
maximum sales price should be reported on
line 5. The term “contingent payment sale”
means a sale or other disposition of property
in which the aggregate selling price cannot be
determined by the close of the tax year in
which such sale or other disposition occurs.
See Temporary Regulations section
15a.453-1(c). If there is no stated maximum
selling price, 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.

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.

Page 4

Form 6252 (2023)

Line 15

Part II—Installment Sale
Income

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 19

Line 26

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.

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 2023. 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 2023, enter zero. If in prior years
an amount was entered on the equivalent of
line 34 of the 2023 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 2023 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,
• The pledge rule of section 453A(d), or
• Liabilities assumed by the buyer in excess
of the seller’s basis. This amount is line 20
from the year of sale (within the meaning of
Regulations section 15a.453-1(b)(3)(i)).

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.

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 2023, 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 2023
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.