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July 26, 2022
Question

Tax implication for proceeds from selling an inherited foreign property in multiple installments over N years

  • July 26, 2022
  • 1 reply
  • 0 views

Hello Tax Experts,

 

I have read how to report in Turbotax the sale of an inherited foreign property in this thread:

community/tax-credits-deductions/discussion/tax-implication-for-proceeds-from-selling-an-inherited-foreign-property/00/36634

This is clear when the sale price is paid in full at once, and we report it in just one tax year.

 

What should we do if the sale contract says that the sale price will be paid in N installments (one per year, in N years) ?

Thank you in advance!

 

1 reply

Critter-3
July 26, 2022

If you have an installment sale you simply report it as such in the program ... you will report the principal and interest you recieve each tax year on form 6252 ... follow the screen instructions carefully ....   https://www.irs.gov/forms-pubs/about-form-6252

ceb0Author
July 27, 2022

Thank you so much for your quick replay!!   If you allow me, I have a follow up question:

At the bottom of https://ttlc.intuit.com/community/tax-credits-deductions/discussion/tax-implication-for-proceeds-from-selling-an-inherited-foreign-property/00/36634

I found these instructions:

Actually you will report this next year on your 2022 tax return on the sale of the house. You will not report this on your 2023 tax return. This is how it is reported.

  1. Click on the Federal 
  2. Click on income and expenses
  3. In the full list of income items on your return, scroll to the section labeled Investment Income.
  4. Click start or revisit on the line labeled Stocks, Mutual Funds, Bonds Other.
  5. If you are not using Premier, TurboTax will require you to upgrade in order to enter the sale.
  6. After you have upgraded, continue through until you reach the screen labeled "Did you get a 1099-B or a brokerage statement for these sales?" Answer no.
  7. Choose the appropriate asset from the list on the screen labeled "Choose the type of investment you sold".
  8. Continue through the screens that follow.

You will need to know the total sales proceeds (if you inherited a share of an asset, you need your portion of the sales proceeds) and your portion of the inherited cost basis (the value of the asset on the date of death of the person from whom you received the inheritance).

Now my questions are: 

1) Does TurboTax support creating the Installment Sale Income Form 6252 which you indicated ?

2) Additionally, do I need to file Form 3520 (Receipt of certain large gifts or bequests from certain foreign persons), because I inherited the land from a foreign person ?

 

Thank you so much for your help !!!

Critter-3
July 27, 2022

1) Does TurboTax support creating the Installment Sale Income Form 6252 which you indicated ?  YES

2) Additionally, do I need to file Form 3520 (Receipt of certain large gifts or bequests from certain foreign persons), because I inherited the land from a foreign person ?  YES