A Closer Look Into Installment Sales (Completed)

The installment method of accounting applies automatically to any sale of property for which the seller receives at least one payment for the property in a year beyond the year of sale, unless the taxpayer elects out or unless the property is ineligible for the installment method.

This course demonstrates how to calculate and report gain for each year under the installment method, contingent payment installment sales and other installment sales with a variable sales price, the risks of pledging or transferring installment notes, and other installment sale issues.

Who Should Attend
Tax practitioners at all levels who provide advice and return preparation on transactions involving installment notes, such as real estate transactions and sale of businesses.

Topics Covered

• Definition of installment method
• Mechanics of installment method gain reporting
• Contingent payment installment sales
• Transfer of installment obligations
• Interest charge on large installment sale notes

Learning Objectives

• Recognize when installment method applies
• Identify how gain is calculated and reported under the installment method
• Describe contingent payment installment sale rules and differentiate when and how they apply
• Identify special rules regarding transfer of installment obligations and interest charges on large installment obligations

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic familiarity with sale transactions, including how to calculate gain and loss

Advance Preparation
None