A taxpayer is selling land held for investment purposes.Payments will be received under the terms of a five-year installment note.Which of the following circumstances would suggest consideration of an election out of the installment method?

Question

Quizplus · Accepted Answer

A taxpayer with a substantial capital loss carryforward may benefit from electing out of the installment method because it allows them to offset the gain recognized from the sale with their capital losses, resulting in a lower tax liability. The other options listed do not suggest a need to elect out of the installment method.

A Taxpayer Is Selling Land Held for Investment Purposes