Pennsylvania PA Schedule D-1 - Computation of Installment Sale Income

PA Schedule D-1 - Computation of Installment Sale Income
PA Schedule D-1 - Calculation of Installment Sale Income (Form and Instructions) (REV-1689)
2302210055

START PA Schedule D-1

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REV-1689 (EX) 10-23 (FI)
PA DEPARTMENT OF REVENUE

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OFFICIAL USE ONLY

CALCULATION OF INSTALLMENT SALE INCOME - See the instructions. Submit PA Schedule D-1 with your PA tax return.
Use a separate schedule for each sale on the installment method. Refer to the PA PIT Guide on the Department of Revenue’s
website at revenue.pa.gov for additional information. For PA PIT purposes, you cannot sell intangible property using the
installment method.
Social Security Number

Corporate Tax File (Box) Number

Federal EIN

Name(s) as shown on return

Date Acquired

Date Sold

Description of Property

For PA PIT purposes, if acquired prior to June 1,1971, fill in oval for method of computing June 1,1971 value:

Appraisal

Proration - Attach PA Schedule D-71 (REV-1742)

Complete Sections I and II for each tax year gain is reported for an installment sale.

SECTION I

CALCULATION OF GAIN AND SELLING PRICE

1. Selling price including mortgages and other debts. Do not include interest whether stated or unstated. . . . . . . . .

1.

2. Mortgages, debts, and other buyer assumes. Include such indebtedness that the property is subject to.
Do not include new mortgages from a bank or other source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Subtract Line 2 from Line 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Cost or other basis of property sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Depreciation allowed or allowable. If computing the June 1, 1971 value by the Appraisal Method, enter amount
from PA Schedule D-71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

6. Adjusted basis. Subtract Line 5 from Line 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Commissions and other expenses of sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Add Line 6 and Line 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Gain or loss. Subtract Line 8 from Line 1. If the result is zero or less, do not complete the rest of this form.
Report the entire sale on a PA Schedule D or other appropriate schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

5.

9.

10. Subtract Line 8 from Line 2. If zero or less, enter zero. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Contract price. Add Line 3 and Line 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.

SECTION II

CALCULATION OF TAXABLE PART OF INSTALLMENT SALE

12. Proportional gain ratio Divide Line 9 by Line 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. For year of sale only, enter amount from Line 10. Otherwise, enter zero. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Principal payments received during taxable year. Do not include interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Total payments. Add Line 13 and Line 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Payments received in prior years from this sale only for the sale reported to Pennsylvania using the installment
method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Taxable part of installment sale. Multiply Line 15 by Line 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
LOSS

18. Net interest income received during the year on the property sold. Fill in the oval if this is a loss. . . . . . .
18.
19. Taxable installment gain. Add Lines 17 and 18. Enter here and on your PA Schedule D or other
appropriate schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.

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Pennsylvania Department of Revenue

Instructions for REV-1689

PA Schedule D-1

REV-1689 IN (EX) 10-23

GENERAL INSTRUCTIONS
Use PA Schedule D-1 if you elect the installment sale
method to report gain from a sale of real or tangible personal property. If you sell property in the regular and ordinary
course of business on the installment method, such as
inventory, report such activity on your PA Schedule C or F.
You may not report a loss on an installment method.

prior to June 1, 1971, use the adjusted or alternative basis
as determined for Column e on PA Schedule D-71.

LINE 5

LINE INSTRUCTIONS

DEPRECIATION ALLOWED OR ALLOWABLE
Enter all depreciation or amortization you deducted or
should have deducted from the date of purchase until the
date of sale. Pennsylvania law does not conform to Federal
law to allow federal bonus depreciation. Note, an adjustment for depreciation expense and/or IRC §179 deduction
may be required based upon the treatment of the assets if
they differ from federal to Pennsylvania for tax purposes.
For assets where basis is different between federal and PA,
you must calculate depreciation expenses on a straight-line
basis. You need the amount of straight-line depreciation if
you need to take advantage of Pennsylvania’s Basis
Adjustment Rules for Depreciation when you sell the asset.
Refer to the PA Personal Income Tax Guide – Net Gains or
Losses from the Sale, Exchange, or Disposition of Property
section for additional information. If the property was
acquired prior to June 1, 1971 and you are using the alternative basis of the property, include only depreciation or
amortization after June 1, 1971.

LINE 1

LINE 7

GROSS SALES PRICE
Enter the total amount of money, the face amount of the
installment obligation, and the fair market value of other
property (such as the buyer’s note) that you received or will
receive in exchange for the property you are selling. Include
on Line 1 any existing mortgage or other debt on the property the buyer assumes. Do not include interest.

COMMISSIONS AND OTHER EXPENSES OF SALE
Enter sales commissions, advertising expenses, attorney
and legal fees, transfer taxes, or other expenses you
incurred in selling the property.

The installment sale method is not permitted for sales of
intangible personal property, transactions for the purpose of
lending money or rendering services, or for taxpayers using
the accrual method of accounting.
An installment sale election is irrevocable. If you cannot or
do not elect to report a sale by the installment method,
complete PA Schedule D reporting the entire gain received
from the sale.
If you acquired the property prior to June 1, 1971, obtain PA
Schedule D-71, REV-1742, “Gain or Loss on Property
Acquired Prior to June 1, 1971” to first determine the taxable gain.

LINE 2
MORTGAGE AND OTHER INDEBTEDNESS
Enter only mortgages or other indebtedness on the property the buyer assumes from the seller. Do not include new
mortgages the buyer gets from a bank, the seller, or other
source.

LINE 4
COST OR OTHER BASIS OF PROPERTY SOLD
Enter the original cost or basis and all expenses you
incurred in buying the property. Add capital improvements,
but not repairs, to your basis. If the property was acquired
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LINE 9
GAIN OR LOSS FROM SALE
Subtract Line 8 from Line 1. If the result is zero or less, do
not complete the rest of this form. Report the entire sale on
a PA Schedule D or other appropriate schedule, and submit
it with your PA tax return.

LINE 12
EXPRESS THE PROPORTIONAL GAIN RATIO BY A
FRACTION OR BY A DECIMAL CARRIED TO AT LEAST
SIX PLACES
NOTE: If the mortgage the buyer assumes (Line 2) is
equal to or greater than the seller’s basis in the
property (Line 8), the proportional gain ratio will always be
1.000.
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LINE 14

LINE 17

PAYMENTS RECEIVED DURING THE YEAR
Enter all money you received and the fair market value of
any property you received during the taxable year. Include
as payments any amount withheld to pay off a mortgage or
other debt, such as brokers’ and legal fees. Do not include
the buyer’s note, or any mortgage or other liability assumed
by the buyer. If you did not receive any payments in the taxable year, enter zero.

TAXABLE PART OF INSTALLMENT SALE
Enter result here and on the appropriate schedule for your
tax return.

LINE 16
PAYMENTS RECEIVED IN PRIOR YEARS
Enter all money and the fair market value of property you
received and reported in prior years from this installment
sale. Only include payments for sales reported to
Pennsylvania using the installment method of reporting.

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LINE 18
NET INTEREST INCOME
Enter the total interest you received during the year, less
the interest expense you incurred during the year, on the
property sold. If the expense is more than the income, enter
the loss and fill in the oval.

LINE 19
TAXABLE GAIN
Add Lines 17 and 18.

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