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installment method

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installment method
The accounting method of treating revenue from the sale of an asset on installments such that profits are recognized in proportion to the percentage of the sale price collected in a given accounting period. For example, if an asset with a book value of $12,000 is sold for $15,000 and payment is to occur in 5 equal installments of $3,000 each, the seller would record annual profits of ($15,000 - $12,000)/5, or $600. The installment method is a conservative way of treating an installment sale because profit is not recognized until receipt of payment.

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In Gimbel, the taxpayer had used the accrual method, which was impermissible given the installment method election it had made.
72 in a manner similar to the installment method of IRC Sec.
The company had sold property in 1995, reporting the gain on the installment method.
 
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