1120-US: Payments received in the current year calculated on Form 6252 printing for the like-kind exchange installment gain (FAQ)

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Question

How are the payments received in the current year calculated on Form 6252 printing for the like-kind exchange installment gain?

Answer

UltraTax CS calculates the current-year payments received for a like-kind exchange reported on an installment method by taking the total selling price reported on Form 6252 less the installment obligation received. Per Proposed Regulation 1.453-1(f)(1)(iii), the payment in the year of exchange includes any net qualifying indebtedness that exceeds the excess basis. In example (2) under the Proposed Regulation, the cash received in the year of exchange is also included in the payment. Therefore, UltraTax CS treats the amount of net qualifying indebtedness which exceeds the excess basis, and the amounts received in the exchange, other than the installment obligation received, as a current year payment.

Related topic: 1120-US: Reporting gain from like-kind exchange on the installment method FAQs

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