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The installment method can be used to defer some tax on capital gains, as long as you receive at least one payment for a piece of property after the year of the sale. It can't be used if the sale results in a loss. The bad news is that payments for many (or even most) of the assets of your business are not eligible for installment sale treatment. In most cases, only gain on assets that have appreciated in value beyond their original purchase price will be eligible for installment sale treatment.
Installment sales are reported on IRS Form 6252, Installment Sale Income. A separate form should be filed for each asset you sell using this method. You must file this form in the year the sale occurs, and in every later year in which you receive a payment.
The file is in Adobe Portable Document Format (.pdf), and you will need the free Acrobat Reader to view and print the file.
Toolkit is providing these tools free of charge. Some of these forms contain technical language and create significant legal obligations. Do not use any form without first having an attorney review the form and determine that it is suitable for the purpose for which you intend it.