Question

how do i enter s1250 depreciation on form 6252

Forum|Forum|1 year ago
March 6, 2025
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To report Section 1250 depreciation on Form 6252 (Installment Sale Income), follow these steps.

Open you TurboTax return.
Go to income
Less Common income
Installment Sales

As you begin answering questions about your property, it will eventually ask you to enter the type of property it is. If it's residential real estate, you will show that and it'll eventually ask about depreciation. If you properly reported this sale in Schedule E or another Schedule, the recaptured depreciation will flow to your 6252. You will need to record this information in Schedule E before completing your 6252. This'll generate a form 4797 and then copy to your 6252. Here is how it should work if you enter the information directly on the forms instead of through the process I just described.

Calculate Recapture Amount: Determine the amount of depreciation recapture under Section 1250. This is the portion of the gain attributable to depreciation deductions taken on the property.
Complete Form 4797: Use Part III of Form 4797 (Sales of Business Property) to calculate the ordinary income recapture. The recapture amount is entered on Line 31 of Form 4797.
Enter on Form 6252 on Line 12 to report the recapture amount calculated on Form 4797.

Make sure this is reported correctly in your forms.

Publication 537 (2024), Installment Sales

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F

freeweyAuthor

It does not ask for depreciation. That is the problem. There is no schedule E. The house was sold in 2021. I tried entering on sale of property and got error saying sale date had to be 2024. No place to enter S1250 depreciation. Calculating tax at incorrect rate.

KrisD15

Depreciation Recapture needs to be claimed in the year of the sale.

You would have needed to claim that in 2021 and use the installment method for the Capital Gain portion of the sale proceeds.

According to the IRS:

"Situations where the installment method isn't permitted
Installment method rules don't apply to sales that result in a loss. You can't use the installment method to report gain from the sale of inventory or stocks and securities traded on an established securities market. You must report any portion of the gain from the sale of depreciable assets that's ordinary income under the depreciation recapture rules in the year of the sale. For additional situations and information about when you can't report payments on the installment method, see Publication 537, Installment Sales."

Additionally:

"If you sell property for which you claimed or could have claimed a depreciation deduction, you must report any depreciation recapture income in the year of sale, whether or not an installment payment was received that year. Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. Report the recapture income in Part II of Form 4797 as ordinary income in the year of sale. The recapture income is also included in Part I of Form 6252. However, the gain equal to the recapture income is reported in full in the year of the sale. Only the gain greater than the recapture income is reported on the installment method. For more information on depreciation recapture, see chapter 3 of Pub. 544.

The recapture income reported in the year of sale is included in your installment sale basis in determining your gross profit on the installment sale. Determining gross profit is discussed under General Rules, earlier."

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Mike9241

there is no separate line for 1250 deprecition.

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freeweyAuthor

No. Online version of Turbo tax does not have an entry for depreciation on prior year installment sale and does not allow access to the form. Therefore it is calculating tax at incorrect capital gain rate. The results are wrong. I cannot and will not knowingly submit an incorrect return even if it does give me a much larger refund. Please correct your program!