Installment Sale Income Calculator

Estimate how much gain to report this year and in future years under the installment method (IRC §453 / Form 6252), including the foreign-currency exchange gain or loss (IRC §988) on sales of property located abroad or paid for in a foreign currency.

1 Sale Setup

These choices determine which Form 6252 lines and which tax rules apply.

Property description

Date of sale *

Date acquired

Default filing status (used for new payment years)

Property was held more than 1 year (long-term capital gain) If unchecked, the capital-gain portion of installment income is taxed at ordinary rates instead of 0/15/20% LTCG rates.

Type of property

Investment / business property (rental, land held for investment, business asset, etc.)

Personal-use property (main home, personal-use real estate or personal property)

Property was depreciated (subject to §1245/§1250 recapture) If checked, depreciation-recapture fields appear in Part I below. Compute the recapture amount on Form 4797, Part III first — this calculator does not derive it for you.

Property was used in an active trade or business I materially participated in If checked, this sale's gain is treated as excluded from Net Investment Income Tax (NIIT) under Reg. §1.1411-4(a)(1)(ii). Rental real estate is usually not an active trade or business for this purpose unless real-estate-professional / material-participation tests are met — verify with your preparer.

This is a sale of property located abroad, or payments are made in a foreign currency Turns on IRC §988 foreign-currency exchange gain/loss tracking for every payment received.

Legal basis for the foreign-currency treatment

Total transaction amount fixed at the sale-date rate: under Treas. Reg. §1.988-2(b), the U.S.-dollar principal amount of a debt instrument (including an installment note) denominated in a nonfunctional currency is determined by translating it at the spot rate on the "booking date" — here, the date of sale. This dollar amount is what drives the §453 gross profit, contract price and gross-profit percentage, and it is not recomputed later even if the currency moves.

Later payments re-translated at the receipt-date rate: when a payment is actually received, its dollar value is measured again at the spot rate on that date. The difference between the two dollar values is a separate §988 foreign-currency exchange gain or loss — ordinary income or loss under IRC §988(a)(1)(A), distinct from and in addition to the §453 capital-gain computation.

Personal-use property — $200 de minimis rule: IRC §988(e)(2) excludes foreign-currency gain from a "personal transaction" of an individual entirely if the gain on that transaction is $200 or less. If it exceeds $200, the full gain (not just the excess) is recognized. This exemption applies only to gains, and only when the property is personal-use property (not investment/business property) — see §988(e)(3) for the definition of "personal transaction."

2 Part I — Gross Profit & Contract Price Form 6252, lines 5–19

Enter deal-side amounts (selling price, debt assumed, selling expenses) in USD. Basis-side amounts (adjusted basis, depreciation, recapture) are always entered in USD, since those come from your own U.S. tax history.

Selling price, incl. mortgages/debts assumed (Line 5)

Mortgages/debts buyer assumed or took subject to (Line 6)

Adjusted (cost) basis of property (Line 8) — always USD

Depreciation allowed or allowable (Line 9) — always USD

Commissions & other selling expenses (Line 11)

Line 13 — (basis − depreciation) + expenses + recapture

Line 14 — Line 5 − Line 13

Line 16 — Gross profit

Line 17 — excess liabilities (deemed payment)

Line 18 — Contract price

Line 19 — Gross profit %

0.00%

Source

Form 6252 (2025), Part I, lines 5–19, and Instructions for Form 6252 (2025); Pub. 537 (2025), "Figuring Installment Sale Income," Worksheet A, and "Buyer Assumes Mortgage."

3 Interest Check §483 / §1274

The installment note must carry adequate stated interest (generally at least the applicable federal rate). Enter the stated annual interest rate on the note to get a reminder.

Stated annual interest rate on the note (%)

4 Payment Schedule & Installment Income by Year Form 6252, Part II

Add one row per payment (or per year, if only one payment is received per year). The first row should be the year of sale.

Source

Form 6252 (2025) lines 20–26 (installment sale income); Pub. 537 (2025), "Amount to report as installment sale income"; Treas. Reg. §1.988-2(b) (exchange gain/loss on collection of a nonfunctional-currency debt instrument); IRC §988(e) (personal transactions, $200 de minimis); IRC §1(h) and Schedule D Tax Worksheet (unrecaptured §1250 gain, 25% cap); IRC §1411 and Reg. §1.1411-4 (NIIT); Rev. Proc. 2024-40 (2025 rates) and Rev. Proc. 2025-32 (2026 rates).

5 Summary

Total principal received

Total §988 exchange gain/(loss) recognized

Total installment capital gain reported

Total estimated federal tax (all years)

Important — read before relying on this estimate

This tool provides a simplified, educational estimate for planning purposes only. It is not tax advice and does not constitute a completed Form 6252, Form 8960, or any other filing. It does not account for: state or local income tax; the Alternative Minimum Tax; related-party second-disposition rules (§453(e), Form 6252 Part III); the pledge rule (§453A(d)); the interest-on-deferred-tax charge for large obligations (§453A, generally sales price > $150,000 and total nondealer obligations > $5 million); contingent-payment sales (Temp. Reg. §15a.453-1(c)); full computation of unstated interest/OID under §483/§1274; the exact allocation and 25%-cap ordering rules on the Schedule D Tax Worksheet (approximated here); or the fact-specific active-trade-or-business exception to NIIT. Foreign-currency exchange rates must be entered manually — for the sale date, use the rate actually used in the contract or a reliable daily spot-rate source; for U.S. tax-return purposes, the IRS accepts the IRS Yearly Average Exchange Rates or the Treasury Reporting Rates of Exchange as a consistent source, or the actual spot rate on the transaction date. Always confirm results with a qualified preparer before filing.