An 'Installment Sale' occurs when you sell property on a payment plan and receive at least one payment after the end of the tax year of the sale. You report the income in the year it was received. Use Form 6252 to report income from an installment sale on the installment method.
You can 'Elect Out' of using the installment method by claiming all of the gain of the sale on your tax return in the year of the sale. If you choose to do this, report the income on Schedule D instead.
Don't file Form 6252:
- If the sale does not result in a gain (even if you will receive a payment after the year of the sale). Use form 4797, 8949 or Schedule D (whichever applies) instead to report the sale.
- 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.
- If you do not wish to use the installment method. Instead, report the transaction 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 and wish to change it, you can amend the return 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.