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Course Details

Installment Sales - Tax Mini Course (Course Id 134)

Updated / QAS / Registry / EA
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Author : Danny C Santucci, JD
Course Length : Pages: 29 ||| Word Count: 15,554 ||| Review Questions: 10 ||| Final Exam Questions: 10
CPE Credits : 2.0
IRS Credits : 2
Price : $17.95
Passing Score : 70%
Course Type: NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents
Technical Designation: Technical
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 134

Description :

An installment sale is a sale of property where one or more payments are received after the close of the tax year. This installment sales treatment CPE mini-course discusses the particulars of installment sales, including requirements, calculations, and pitfalls. Cross issues such as a combined installment sale and like-kind exchange, the impact of related parties, pledging, repossession, and contingent payments are reviewed. Also, the importance of recognizing the dangers of dealer status, inventory, purchase price allocation, and installment note disposition is emphasized.

Usage Rank : 12500
Release : 2024
Version : 1.0
Prerequisites : General understanding of federal income taxation.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 06-Jun-2024
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 134

Keywords : Taxes, Installment, Sales, Tax, Mini, Course, cpe, cpa, online course
Learning Objectives :

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

    At the start of the materials, participants should identify the following topics for study:
      * Installment method
      * Installment income
      * Imputed interest & OID
      * Related party sales
      * Like-kind exchanges
      * Contingent payments or price
      * Sale of a business
      * Dealer dispositions
      * Installment notes in excess of $5 million
      * Dispositions of installment obligations
Learning Objectives:
    After reading the materials, participants will be able to:
      1. Recognize the importance, particularly in tax deferral, of the installment method and, identify §453 requirements and installment method terminology.
      2. Specify the imputed interest, OID, and §1038 repossession rules affecting installment sales and subsequent repossessions.
      3. Identify the following §453 pitfalls and complexities: the related party limitation, the regulations governing the use of the installment sale method in like-kind exchanges, and the contingent payment sale rules.
      4. Determine how to allocate and report installment payments among identified asset classes using R.R. 76-110 and the residual method recognizing §453 prohibitions on certain assets regarding dealer dispositions and inventory.
      5. Identify the amount of interest payable on tax-deferred income when §453 dispositions exceed $5 million and circumstances considered taxable dispositions of installment obligations to determine when any gain or loss is recognized.
Course Contents :

Chapter 1 - Installment Sales


Installment Method




Special Rule

Sale at a Loss

Installment Income

Interest Income


Definitions & Terminology

Installment Sale

Selling Price

Selling Price Reduction


Basis & Adjusted Basis

Installment Sale Basis

Selling Expense

Gross Profit

Contract Price

Gross Profit Percentage

Income from Sale

Payments in Year of Sale

Electing Out of the Installment Method

Selling Price

Fair Market Value

How to Elect Out

When to Elect Out


Buyer’s Note

Assumed Expenses

Mortgage Assumed

Mortgage Less Than Basis

Mortgage More Than Basis

Wrap-around Mortgages

Mortgage Canceled


Payments of Property

Fair Market Value

Third-Party Notes





Limit on Payment Treatment


Escrow Accounts

Escrow Established In a Later Year

Substantial Restriction


Imputed Interest & OID


Sale at a Loss

Section 483 - Imputed Interest


Imputed Interest Rates

Small Transaction Exception

Intra-family Land Exception


Sections 1271-1274 – Original Issue Discount (OID)

OID Rates


Cash Method Debt Instrument Exception

Computation of OID

Personal Use Property - Buyer’s Deduction of Imputed Interest


Section 1038 - Repossession by Seller

Repossession of Principal Residence

Related Party Sales

Sale of Depreciable Property


Resale Rule

Related Persons


Like-Kind Exchanges

Installment Payments

Final Regulations & Delayed Exchanges

Contingent Payments or Price

Installment Sales Revision Act of 1980

Contingent Payment Sale

Maximum Selling Price Transactions


Fixed Payment Term Transactions


Transactions with Neither Maximum Selling nor Fixed Payment Term


Income Forecast Method



Special Rules


Single Sale of Several Assets

Sale of a Business

Residual Method

How to report


Sale of Partnership Interest

Dealer Dispositions


Residential Lot & Timeshare Exception

Interest Computation


Installment Notes in Excess of $5 Million

Computation of Interest



Dispositions of Installment Obligations

Gain or Loss



Tax-free Transfers

Transfers Between Spouses or Former Spouses



Forgiving Part of the Debt


Death Transfers


Sale of Future Cash Flow



Tax CPE Courses: https://www.cpethink.com/tax-cpa-courses
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