Discussion:Form 6252--Installment sale question
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Revision as of 03:17, 20 June 2006
Discussion Forum Index --> Tax Questions --> Form 6252--Installment sale question
DR BRISKET (talk|edits) said: | 20 June 2006 |
| I am working on a 2005 individual return that is on extension. Client sold a home on contract in 1997. Each year since, client has received principle and interest payments from the buyer, with everything properly reported on Form 6252. In 2005, the buyer made only nine payments, then ran into financial difficulty. At the time, my client was still owed approx. $26,000. The house was appraised for $65,000. Client offered to re-purchase the home for $10,000, which buyer agreed to. My question is: What is the new basis in the home my client essentially re-possessed? My thinking is that I will need to go back to the original basis, and decrease it each year by the non-taxable portion of the principle payments including the nine payments received in 2005. To this figure, I would then add $10,000. Is this correct? Client is currently in process of refurbishing the home, and plans on selling it on a new contract in 2006. | |
