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Course No: 9272823

Installment Sales

$25

  • Credits: 2.0
  • Program level: Overview
  • Prerequisites: General understanding of federal income taxation.

Field of Study: Tax Law Topic

Course Description

An installment sale is a sale of property where one or more payments are received after the close of the tax year. This minicourse discusses the particulars of installment sales, including requirements, calculation, and pitfalls. Cross issues such as a combined installment sale and like kind exchange, the impact of related parties, pledging, repossession and contingent payments are reviewed. Also, the importance of recognizing the dangers of dealer status, inventory, purchase price allocation, and installment note disposition are emphasized.

Learning objectives

  • Recognize the importance, particularly in tax deferral, of the installment method and, identify §453 requirements and installment method terminology.
  • Specify the imputed interest, OID and §1038 repossession rules affecting installment sales and subsequent repossessions.
  • Identify the following §453 pitfalls and complexities: the related party limitation, the regulations governing the use of the installment sale method in like-kind exchanges and the contingent payment sale rules.
  • Determine how to allocate and report installments payments among identified asset classes using R.R. 76-110 and the residual method recognizing §453 prohibitions on certain assets regarding dealer dispositions and inventory.
  • Identify the amount of interest payable on tax-deferred income when §453 dispositions exceed $5 million and circumstances considered taxable dispositions of installment obligations to determine when any gain or loss is recognized.

Advance preparation: none

Course Material: Online Material

Type of delivery method: QAS Self-study

Final examination expiration date:

The program participant will have one year from the date of purchase to complete the course and final examination.

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Web CPE is registered with the IRS to provide Continuing Education (CE) programs to the Enrolled Agents and other tax return practitioners.

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