Concerning the limitations on the installment method for nondealers, which comment below is incorrect? 

An interest charge is imposed when the face amount of a nondealer's installment obligations that arise during a taxable year and are outstanding at the close of the taxable year exceeds $5 million. 

If an installment obligation arising from the sale of property for more than $150,000 is used by the seller as security for a loan, the net proceeds from the loan are treated as a payment on the installment obligation. 

Payments actually received on the installment obligation after it is pledged as security are not included as payments on the obligation until the total payments actually received are more than the amount treated as a payment as a result of the pledge. 

The amount of interest that must be paid on an installment obligation to which the interest rule applies is equal to the “applicable percentage” of the “deferred

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