Discussion Topic: Installment Sales

Use your favorite search engine to find the IRS' website and locate Publication 537: "Installment Sales." After reviewing that publication (and looking ahead to the short installment sales section in Chapter 3),answer the following questions:

• Which form is used to report an installment sale?
• What are the requirements to report a sale on the installment basis for tax purposes?
• If the taxpayer receives money over several periods, why would a taxpayer want to report a sale on the installment basis, rather than in the tax period when the sale originated?
• How would you advise your tax client whether or not to elect the installment method? That is, what factors would you incorporate in that recommendation?