Free Trial: TheSiteFactory.com

NIIT and Installment sale

Technical topics regarding tax preparation.
#1
Kavinju  
Posts:
4
Joined:
27-Dec-2017 8:11am
Location:
Texas
My question is: Can I exclude installment sale from NIIT? As I read the instruction for Form 8960 page 7, line 2 says "Gains and losses excluded from net investment income" and part d of line 2 reads "Gains recognized in the current year for payments received on an installment sale obligation". It looks as if installment sales can be excluded. Here are the details:

Doctors practice sell their practice to a bigger company and every doctor gets their profit (my client's share = 500k) in proportion to their investment. But the sale is classified as an installment sale. Major portion (400k) of the profit is paid in 2018 and the remaining amount is paid over two to three years. My client is an employee while he worked for the practice. I am trying to save 3.8% NIIT for my client. Please help..........
 

#2
Nilodop  
Posts:
11268
Joined:
21-Apr-2014 9:28am
Location:
Pennsylvania
I am sure it was just an oversight on your part to stop the excerpt where you did. Here is the entire quote.
Gains recognized in the current year for payments received on an installment sale obligation or private annuity for the disposition of property used in a non-section 1411 trade or business


Read reg. 1.1411-4(d)(4)(i) and (ii), including the example of an excluded partnership installment sale in (i).
 

#3
Kavinju  
Posts:
4
Joined:
27-Dec-2017 8:11am
Location:
Texas
Thanks a bunch for the help.
 

#4
Posts:
3269
Joined:
21-Apr-2014 7:21am
Location:
The Land
Doctors practice sell their practice


What did they sell – assets, C-corp stock, S-corp stock, partnership interests?

That tiny little fact matters…
 


Return to Taxation



Who is online

Users browsing this forum: DAJCPA, EmpireCPA, Joan TB, mdubincpa, Norman-TX, pegatha, Shoebox and 64 guests