The installment method applies where a payment will be received after the tax year of the sale:
A)By an investor who sold real estate at a gain.
B)By an investor who sold real estate at a loss.
C)By an appliance dealer who sold inventory.
D)By an investor who sold IBM Corporation common stock.
E)None of the above.

Question

Quizplus · Accepted Answer

The installment method applies to investors who sold real estate at a gain and will receive payments after the tax year of the sale. This method allows the gain to be spread out over multiple years instead of being taxed all at once.

The Installment Method Applies Where a Payment Will Be Received