Your First Name and Middle Inial Last Name Your Social Security Number
Mailing Address City State ZIP Final Year of Installment Agreement
Name of S Corporaon or Partnership FEIN Minnesota Tax ID Number
Complete this schedule if you are reporng installment sale gains from a sale executed aer December 31, 2016 of any interest in, or as-
sets of, an S corporaon or partnership. These amounts are reported on federal Form 6252 or Minnesota Schedule KF, KPI, or KS. Do not
complete this schedule if you are a full-year Minnesota resident.
I elect to defer installment sale gains under Minnesota Statute 290.0137, paragraph (b), and agree to:
File Minnesota income tax returns in all subsequent years when gains are recognized from an installment sale executed aer
December 31, 2016
Allocate gains to the state of Minnesota as though the gains were realized in the year of sale
Include all relevant federal tax documents reporng the installment sale with subsequent Minnesota tax returns
If you elect to defer, STOP HERE. Submit this form to verify your elecon. If you do not elect to defer installment sale gains, complete the
rest of this schedule.
1 Gross prot from Minnesota Schedule KF line 6a, KPI line 8a, and KS line 8a, or
federal Form 6252 line 16 in the year of the sale ........................................... 1
2 Installment sale income received in prior years, from years from the sale (see instrucons). ....... 2
3 Installment sale income from Minnesota Schedule KF line 6b, KPI line 8b, and KS line 8b,
or federal Form 6252 line 24 in the current year ........................................... 3
4 Add lines 2 and 3 ..................................................................... 4
5 Subtract line 4 from line 1. Enter the amount here and include on line 12 of Schedule M1M....... 5
Residents at the me of sale: Also include this amount on line 10 of Column B
of Schedule M1NR. STOP HERE.
Nonresidents at the Time of Sale
6 Enter the S corporaon’s or partnership’s apporonment percentage for the year of sale ........ 6
7 Allocaon percentage of nonbusiness income (see instrucons) .............................. 7
8 Enter the amount from line 5 that is nonbusiness income (see instrucons) .................... 8
9 Subtract line 8 from line 5 ............................................................. 9
10 Mulply line 7 by line 8 .............................................................. 10
11 Mulply line 6 by line 9 .............................................................. 11
12 Add lines 10 and 11. Enter the result here and include on line 10, Column B, of Schedule M1NR ... 12
2019 Schedule M1AR, Accelerated Recognion of
Installment Sale Gains
9995
*191861*
2019 Schedule M1AR Instrucons
You must complete a separate Schedule M1AR for each installment gain you are reporting.
Who should complete this schedule?
You may be required to complete this schedule to report one of the following:
Installment sale income from the sale of S corporation stock, a partnership interest, or the assets of an S corporation or partnership
Income from an S corporation, partnership, or trust that is reporting income from any installment sale of S corporation stock, a partnership
interest, or the assets of an S corporation or partnership
If you report income from either situation above, complete Schedule M1AR if all of the following apply:
The installment sale was executed after December 31, 2016.
You were a nonresident or become a nonresident while recognizing income from the installment sale gains.
The S corporation or partnership had a Minnesota ling requirement, or you were a Minnesota resident, during the year that the sale oc-
curred.
Do not complete this schedule if you are a full-year Minnesota resident. You are not required to complete this schedule to report the install-
ment sale of property not connected to the sale of an S corporation or partnership.
What informaon will I need to complete this schedule?
If you completed an installment sale and reported it (or should have reported it) on federal Form 6252 with your federal individual income
tax return, you must include information from Form 6252 on this schedule.
If you own an interest in an S corporation, partnership, or trust that completed an installment sale, you will need information reported to you
on one of the following schedules:
Schedule KS for S corporation shareholders
Schedule KPI for partners in partnerships
Schedule KF for trust beneciaries
What if installment gains from the sale are undetermined in the year of sale?
Complete and le Schedule M1AR even if the income from an installment sale is undetermined. This includes sales with no stated maximum
selling price, such as a contingent payment sale. See Internal Revenue Service Publication 537, Installment Sales, for more information.
How do I allocate nonbusiness income?
Partnership Interests
If you are declaring nonbusiness income from the sale of a partnership interest, use one of the following ratios.
If the assets of the partnership consist of more than 50 percent tangible property at the time of sale, the ratio is equal to the original cost of
tangible property in Minnesota divided by the original cost of all tangible property of the partnership.
If the assets of the partnership consist of more than 50 percent intangible property at the time of sale, use the partnership’s sales factor for
the full tax period immediately before the tax period during which the partnership interest was sold.
Single Member Limited Liability Companies (LLC)
If you are declaring nonbusiness income from the sale of an interest in a company that is disregarded for federal income tax purposes, al-
locate it to Minnesota as if the company did not exist and the assets of the company are personally owned by the sole member.
Goodwill and Noncompete Covenants
If you are declaring nonbusiness income from the sale of goodwill or a covenant not to compete, allocate it to Minnesota using the entity’s
prior year sales factor. This includes federal allocations of purchase price to goodwill following the sale of an S corporation or single member
LLC.
Other Income
If the nonbusiness income is not assignable to Minnesota under the methods in this section, assign it to your state of domicile.
Mulple Methods
If multiple methods of nonbusiness allocation are required, include additional information with your return detailing how you applied each
percentage to the separate parts of the purchase price and how the percentages result in the amount listed on line 5.
Line Instrucons
Line 2
Include installment sale gains you received in 2017 and 2018 for the sale reported on Schedule KPI, Schedule KS, Schedule KF, and federal
Form 6252.
Line 6
Enter the S corporation’s or partnership’s apportionment percentage for the year of sale. This information is reported on:
Schedule KS, line 37, for S corporation shareholders
Schedule KPI, line 39, for partners in partnerships
Schedule KF, line 6c, for trust beneciaries
Enter the amount as a decimal carried to ve decimal places.
Line 7
If you are declaring nonbusiness income from an installment sale, use the appropriate method detailed in the instructions of this schedule. If
you use multiple methods of nonbusiness allocation, include additional information with your return explaining how you calculated and ap-
plied each percentage to the separate parts of the purchase price.
Enter the amount as a decimal carried to ve decimal places.
Quesons?
Forms and information are available on our website at www.revenue.state.mn.us.
If you have questions:
Visit our website at www.revenue.state.mn.us
Send us an email at businessincome.tax@state.mn.us
Call us at 651-556-3075