As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

Name: As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.
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Question

Quizplus · Accepted Answer

The wherewithal to pay concept allows taxpayers to recognize gain as they receive payments, not necessarily in the year the sale occurs, which is why installment sales are taxed as payments are received.

As It Is Consistent with the Wherewithal to Pay Concept