Installment Sale Tax Calculator
Separate principal, interest, depreciation recapture and deferred gain for a basic property installment sale under IRS Publication 537.
Incremental federal tax this year
$12,860Installment gain this year
$30,000Recapture recognized now
$30,000Interest income
$8,000Remaining unrecognized gain
$120,000Total gain
$180,000This model assumes contract price equals selling price and does not model assumed debt, related-party dispositions, marketable securities, dealer sales, unstated interest/OID, or IRC §453A interest.
What this estimate covers
- Computes a basic gross-profit percentage and current-year principal allocation.
- Separates recapture and interest from installment-method capital gain.
- Flags major exclusions that require Form 6252 or professional review.
Frequently asked questions
What is the gross-profit percentage?
For a basic installment sale it is installment-sale gross profit divided by contract price. That percentage is applied to principal payments to determine gain recognized each year.
Is interest part of Form 6252 gain?
No. Interest is generally ordinary interest income and is reported separately. Unstated interest or original issue discount rules can recharacterize part of a payment.
Can depreciation recapture be deferred?
Generally no. Recapture income is recognized in the year of sale before the remaining eligible gain is spread under the installment method.
Sources
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