Installment Sales 2016 - 2 CPE
After reading the materials, participants will be able to:
1. Analyze the importance, particularly tax deferral, of the installment method, list three requirements to use the method, and define basic installment method terminology.
2. Apply the imputed interest, OID and §1038 repossession rules to installment sales and subsequent repossessions.
3. Identify and explain 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.
4. Allocate and report installments payments among identified asset classes using R.R. 76-110 and the residual method noting §453 prohibitions on certain assets regarding dealer dispositions and inventory.
5. Compute the amount of interest payable on tax-deferred income when §453 dispositions exceed $5 million and identify circumstances considered taxable dispositions of installment obligations to determine when any gain or loss is recognized.