After paying for 2 years, the buyer has refused to pay further installments. How do I report this on the 1120S?

Forum|Forum|5 months ago
April 13, 2026
3 replies
34 views

The buyer of my practice paid for one and half years and refused further payment saying that she did not meet the guaranteed income for the first year.

ProSeries Professional

Skylane

Intuit Community Champion

Report the income as 0? You may also have to make an adjustment to Sch D and 4797

If at first you don’t succeed…..find a workaround

Accountant-Man

Level 13

Just like any installment sale--calculate the adjusted total gain --Year 1 + Year 2 + Zero Year 3= total gain. Then subtract the reported gain from prior years. You will probably have a capital loss for Year 3.

If you sold it for $150, and received two payments of $50 each in Year 1 and Year 2, and all was taxable $50 in each year, then you have no loss. You sold it for $100 and received $100.

** I am "Elevating with Intention!"

Accountant-Man

Level 13

FYI, I previously purchased 3 customer lists and by the 3rd one I realized I should have reduced the payments when clients left before the final year.

When I sold MY list we calculated it on actual revenues received over 4 years, so new clients good, former clients got no more money for them.

** I am "Elevating with Intention!"

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