installment sale


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Installment sale

The sale of an asset in exchange for a specified series of payments (the installments).

Installment Sale

A sale in which the buyer makes a series of payments instead of a lump sum in order to compensate the seller. The payments in an installment sale often, but do not always, include interest to pay the seller for accepting the credit risk that the buyer will not make payments in a timely manner. An installment sale can have tax advantages for the seller. See also: Credit sale.

installment sale

A sale in which the buyer is scheduled to make a series of payments over a period of time. An installment sale can offer certain tax advantages; however, the seller may have a lengthy wait before receiving the entire proceeds. Virtually any asset, including securities, may be disposed of through an installment sale.

installment sale

See installment contract.

References in periodicals archive ?
This is where an installment sale could fend off these additional taxes by spreading the income over multiple years.
453A(a)(1) imposes an interest charge on nondealer installment obligations where the property's sales price exceeds $150,000 and the total amount of all installment sale obligations that arose during the tax year and were outstanding at the end of the tax year exceed $.
A taxpayer does not need to elect installment sale treatment.
For IRS purposes, whether or not seller elects the Installment Sale method, the parties must agree on the allocation of purchase price among the various types of assets, using fair market value (FMV] as the guide.
The child's obligation to the parent may be secured, which also distinguishes the installment sale from the private annuity.
The investor must decide whether the installment sale is better than waiting for a cash buyer, or substantially reducing the price for a quicker cash sale.
The self-cancelling installment note, or SCIN, is a variation of the installment sale, a hybrid between an installment sale and a private annuity (see Chapter 36).
See the article "Deferred Gain on the Installment Sale of Intangible Asset, AB 115's Unraveling Begins" (Spidell's CA Tax Letter, October 2003).
Thus, under the new installment sale rules for accrual basis taxpayers, X will recognize the entire amount of the gain or loss from the installment sale in year 1.
The Installment Sales Revision Act of 1980(56) eliminated the 30-percent rules for installment sales occurring in taxable years ending after October 19, 1980.
Once established, the grantor then makes a gift of cash or other liquid assets to the trust, equal in value to 10 percent or more of the value of the property that will be sold to the trust in the subsequent installment sale.
In certain circumstances the installment sale method permits a sale of property without the seller being required to report the gain until the actual receipt of payment.