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Corporate Tax

How to Handle Capital Gain Taxes in Installment Sale?

I'm the seller in an asset sale that is closing this Dec 1st. The payment terms are 1/2 at closing and 1/2 paid over 12 months in monthly installments. With regards to capital gain tax laws, do I pay taxes on the total purchase price in 2016 or do I file the IRS 8594 form for each respective year that I'm receiving payments (2016 & 2017)? Also, what if I wanted to have it all count for this year (due to my personal income tax bracket, which puts me at 0% capital gain tax)? Thank you!

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David Favor

Fractional CTO

Work with your Tax Preparer.

I'd suggest H&R Block Executive Tax Services to ensure all your filings are correct.

Answered over 7 years ago