Technical topics regarding tax preparation.
14-Feb-2020 2:40pm
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I am preparing my first 2019 tax return with an installment sale that began in 2000. The old 6252 forms only required that Part I (showing gross sale price and profit calculations) be completed in the year of sale, but now the form says this section needs to be completed every year. My software (Pro Series) insists that this section be completed.
I do not have digital records going back to 2000, but I know that I have a paper copy of this return in my storage unit. Can't wait to spend time digging that out! But what happens when you don't have the Part I information from many years ago? Most tax preparers would have thrown out a 2000 tax return by now and when you get an installment sale tax return from a prior tax preparer you don't usually have that information.
How can the IRS possibly ask for this information retroactively? Do they ever have tax preparers look at changes they plan to make to the forms???
Have any of you had a problem with this yet? I know that I have many installment sales coming up.
14-Feb-2020 3:21pm
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Use your judgement. Mine tells me to leave it blank, which we’ve already done in our office on a few returns. Make a note to pull it out of storage after tax season.
14-Feb-2020 3:33pm
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I am literally on the phone with ProSeries support about this exact issue. It is a system error. We submitted the error to the developers. Hopefully, an update will be out in a few days.
14-Feb-2020 3:41pm
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It is a system error.
what makes you think this?
From the 2019 instructions for Form 6252:
What’s New
Installment sale reporting. In 2019 and later, if you have an outstanding installment sale balance after the initial year, complete lines 1 through 4, Part I, and Part II for each year of the installment agreement. If you sold property to a related party during the year, also complete Part III.
14-Feb-2020 3:47pm
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In ProSeries, when you put in the info for Part I, the program changes the calculation and spits out incorrect numbers. In my case, the sale was in 2015. Sorry to give such a short explanation. I'm trying to run out of the office. I will try to post more details over the weekend.
15-Feb-2020 8:16am
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Now that I have a minute I will try to explain what happens in ProSeries.
When I enter the original sale info on Form 6252 Part I, the form itself may be correct. Nothing wrong with the 6252 AFAIK.
ProSeries is then taking the gross profit from Form 6252 Part I, Line 16 and entering it into the M-1 as if the sale occurred in the current year. I need to override the field on the M-1 worksheet if I want to get rid of the current-year book/tax difference.
In addition, ProSeries takes the total unrecaptured section 1250 depreciation and reduces the fixed assets on the balance sheet below zero. If you are interested I can post a bunch of screenshots.
TL:DR - ProSeries treats the installment sale info entered on Form 6252 Part I as if it happened in the current year.
15-Feb-2020 11:21am
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AccountingNinja - Thanks for your explanation and making me aware of this issue. When you see that Pro Series has corrected the system error, please post again.
15-Feb-2020 12:19pm
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19-Feb-2020 11:47am
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The form is fixed now. Put a zero for part I box 5 and box 8 and everything should be fine.
20-Feb-2020 6:06pm
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