Monetized Installment Sales, as previously written upon by Gray Edmondson,[1] have been subject to increased scrutiny by the IRS in recent years, making its “Dirty Dozen” list in each of the last three years.[2] The IRS remains on the offensive in scrutinizing such transactions, issuing proposed regulation under Internal Revenue Code Section 6011 in August…
Read More
This article will be the final in a series of articles covering the installment method of reporting income. In our first article of the series, we discussed §453 and the basics of the installment method of income tax reporting.[1] As noted in the article, the installment method of reporting income can be a powerful tax…
Read More
In a previous article, I wrote about the basics of the installment method of income tax reporting under IRC §453.[1] As noted in my prior article, the installment method of income tax reporting can be a powerful way of deferring income tax where the seller receives payments over time. However, there are numerous exceptions and…
Read More
The U.S. Treasury recently issued its “Green Book”[1] which includes, among other items, a proposed increase in the capital gains rate up to 43.4%[2] for taxpayers with incomes over $1 million as well as an elimination of like-kind exchanges where gain deferral will exceed $500,000. This means that taxpayers will be subject to significantly higher…
Read More
It is quite common in transactions for the seller to accept a promissory note with payments over time rather than being paid the full purchase price up front. In this situation, if the taxpayer were to be taxed on the full amount of income at the time of the transaction, but not be paid the…
Read More