The installment method cannot be used to report gain from the sale of stock or securities that are traded on an established securities market.

Question

Quizplus · Accepted Answer

The installment method is not applicable to the sale of stock or securities that are traded on an established securities market. This is because the market price is readily available, and there is no uncertainty regarding the ultimate collection of the sale price. The installment method is typically used for sales of property where there is uncertainty regarding the collectability of the sale price, and the gain can be reported over time as payments are received.

The Installment Method Cannot Be Used to Report Gain from the Sale