TEXAS COMPLIANCE PENDING:
Texas requires a class be reviewed by enough students to assign earned CPE credits. This course is still new enough that we are obtaining the reviews needed. We recommend Texas CPAs check back soon. This process is usually finished within a few weeks.
Installment Sales
Mini-Course Description & Study Guide
An installment sale is a sale of property where one or more payments are re-ceived after the close of the tax year. This mini-course discusses the particulars of installment sales, including requirements, calculations, and pitfalls. Cross is-sues 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, pur-chase price allocation, and installment note disposition are emphasized.
Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provid-ed.
Course Level: Overview. This program is appropriate for professionals at all or-ganizational levels.
Field of Study: Taxes
Prerequisite: General understanding of federal income taxation.
Advanced Preparation: None
Learning Assignment & Objectives
As a result of studying the assigned materials, you should be able to meet the ob-jectives listed below.
ASSIGNMENT
At the start of the materials, participants should identify the following topics for study:
* Installment method
* Installment income
* Imputed interest & OID
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* 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 in-stallment method and, identify §453 requirements and installment method terminology.
2. Specify the imputed interest, OID, and §1038 repossession rules af-fecting 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 installments payments among identified asset classes using R.R. 76-110 and the residual method rec-ognizing §453 prohibitions on certain assets regarding dealer disposi-tions and inventory.
5. Identify the amount of interest payable on tax-deferred income when §453 dispositions exceed $5 million and circumstances consid-ered taxable dispositions of installment obligations to determine when any gain or loss is recognized.
After studying the materials, answer exam questions 1 to 10.
Notice
This course and test have been adapted from materials and information contained in the above text and any supplemental material provided. This course is sold with the understand-ing that the publisher is not engaged in rendering legal, accounting, or other professional ad-vice and assumes no liability whatsoever in connection with its use. Since laws are constantly changing, and are subject to differing interpretations, we urge you to do additional research and consult appropriate experts before relying on the information contained in this course to render professional advice.
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