Taxable gain on repossession of Real property

[ShawnE]

Could my client end up with a loss??

There are the facts as on the worksheet:

1 total payments received = 26875.35

2 Gain reported as income = 20512.60

3 subtract and you get gain on repossession = 6362.75

4 Gross profit on original sale = 14900.00

5 cost of repossesing = 1803

6 add line 2 & 5 = 22315.60

7 subtract line 6 from line 4 = (7415.60)

8 enter lesser of line 3 or 7. This is taxable gain = (7415.60)

a loss???? or am I reading the math on line 8 backwards?

:wall:

[ShawnE]

btw - property is land

report the gain/loss on sch D?

I did the basis worksheet too. Done this before but never with a negative.

[ShawnE]

Figured it out - I think. The prob lies in the fact that the land was 50% owned. I think the prior

preparer put all of the payment on the form then hit it with the profit percentage. So the amounts were over reported. gads!!

now what gang!!!