Gain from an Installment Sale of QSB Stock

If all payments aren’t received in the year of sale, a sale of QSB stock that isn’t traded on an established securities market is generally treated as an installment sale and is reported on Form 6252. Report the long-term gain from Form 6252 on Schedule D, line 11. Figure the allowable section 1202 exclusion for the year by multiplying the total amount of the exclusion by a fraction, the numerator of which is the amount of eligible gain to be recognized for the tax year and the denominator of which is the total amount of eligible gain. In column (a) of Form 8949, Part II, enter the name of the corporation whose stock was sold. In column (f), enter “Q,” and in column (g), enter the amount of the allowable exclusion for the year as a negative number. See the Instructions for Form 8949, columns (f), (g), and (h). If you are completing line 18 of Schedule D, enter as a positive number the amount of your allowable exclusion for the year on line 2 of the 28% Rate Gain Worksheet; if you excluded 60% of the gain, enter 2 / 3 of the allowable exclusion for the year; if you excluded 75% of the gain, enter 1 / 3 of the allowable exclusion for the year; if you excluded 100% of the gain, don’t enter an amount.