Question

Wayne is a calendar year tax pair he sells his business in April 2017 when is the earliest he can receive his final payment under the installment agreement and have this transaction qualified as an installment sale under IRC 453

Answer 1

Provision : - An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. This method of reporting gain is called the installment method. You can’t use the installment method to report a loss. You can choose to report all of your gain in the year of sale.

Coclusion:- So Wayne can receive his final payment after the tax year of sale i.e. 2018

Provison : - An installment sale, in general, does not include disposition of personal property from a person who regularly sells that same type of property, like a real estate agent or broker, or property that is sold to customers in the ordinary course of the taxpayer’s occupation, such as with farmland. In some situations, when there are gains on the dispositions of the property, the installment method may be used. Proceeds from an installment sale can come in later tax years, which are reported unless the taxpayer is not using the installment method..

Conclusion:- Yes this transaction is qualified as an installment sale under IRC 453 if he receive payment in installment of his property