Frequently Asked Tax Questions And Answers
Keyword: Installment Proceeds
4.2 Interest/Dividends/Other Types of Income: 1099–INT Interest Income
How do I report interest received on an installment sale?
If you receive interest on an installment sale, report the entire amount
on line 8a of Form 1040 (PDF) or Form 1040A (PDF), or line 2 of Form 1040EZ (PDF).
If your taxable interest income is more than $1,500, be sure to show that
income on Schedule B of Form 1040, or on Schedule 1 of Form 1040A. You cannot
file Form 1040EZ if your interest income is more than $1,500. Refer to Tax Topic 403, Interest Received, for additional information on interest
income Form 1040, Schedule B (PDF). For additional
information on installment sales, refer to Tax Topic 705, or Publication 537, Installment Sales.
References:
11.4 Sale or Trade of Business, Depreciation, Rentals: Sales, Trades, Exchanges
How do I file the gain on an installment sale of business property
in each year? What form do I use?
Use Form 6252 (PDF), Installment Sale Income,
to figure your installment sale income each year. This form does not account
for taxable interest income from the sale that needs to be reported each year
by the seller, usually on Form 1040, Schedule B (PDF),
Interest and Ordinary Dividends.
You may also need Form 1040, Schedule D (PDF), Capital
Gains and Losses, and Form 4797 (PDF), Sales
of Business Property. For additional information including forms and
instructions, refer to Publication 537, Installment Sales
References:
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