Form 6252, Installment Sale Income
Form 6252 reports income from an installment sale: a sale of property where you receive at least one payment after the year of sale. Fill in the official IRS PDF below and download it for your return.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is 6252?
When you sell property and collect the price over more than one tax year, the installment method lets you spread the gain across the years you receive payments instead of recognizing it all at once. Form 6252 figures the gross profit percentage in the year of sale and applies it to the payments received each year to determine how much gain to report.
You file the form for the year of sale and again for each year you receive a payment. The gain flows to Form 4797 or Schedule D depending on the type of property. Some sales cannot use the installment method, such as sales of inventory or publicly traded securities, and sales to related parties have special rules.
Who files 6252?
- Sellers of real estate or a business who financed the sale and collect payments over multiple years
- Taxpayers reporting gain in a year they received an installment payment from a prior-year sale
- Sellers who disposed of the installment obligation itself and must report the remaining gain
- Taxpayers with installment sales to related parties, who complete the related-party section for the first years after the sale
How to fill out 6252
- In the year of sale, complete Part I to figure the selling price, basis, gross profit, and gross profit percentage.
- Each year you receive payments, complete Part II to apply the gross profit percentage to the payments and figure the taxable gain.
- Report any depreciation recapture in full in the year of sale, as the form directs, even if payments come later.
- Complete Part III for the first years after a sale to a related party, reporting whether they resold the property.
- Carry the gain to Form 4797 or Schedule D as appropriate, then download the completed PDF and attach it to your return.
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Frequently asked questions
Can I choose not to use the installment method?
Yes. You can elect out by reporting the entire gain in the year of sale on Form 8949, Schedule D, or Form 4797 instead of filing Form 6252. The election is generally made by the due date of that year’s return and is hard to undo, so check the instructions first.
Does interest on the payments go on Form 6252?
No. Only the gain calculation goes on Form 6252. Interest you charge the buyer is reported separately as interest income, and most seller-financed sales must charge at least a minimum rate of interest.
What if I sell to a family member?
The installment method can still apply, but if the related buyer resells the property within two years, some or all of your remaining gain may be accelerated. Part III of the form tracks this for the first years after the sale.