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previous page Previous Page: Publication 536 - Net Operating Losses (NOLs) for Individuals, Estates, and Trusts - How To Get Tax Help
next page Next Page: Publication 537 - Installment Sales - General Rules
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p537-000.htm#en_us_publink10001143
Publication 537

Installment Sales


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Reminder(p1)


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taxmap/pubs/p537-000.htm#en_us_publink10001145

Photographs of missing children.(p1)

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p537-000.htm#TXMP4a76d295Introduction

Note. Section references within this publication are to the Internal Revenue Code and regulation references are to the Income Tax Regulations under the Code.
An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. This method of reporting gain is called the installment method. You cannot use the installment method to report a loss. You can choose to report all of your gain in the year of sale.
This publication discusses the general rules that apply to using the installment method. It also discusses more complex rules that apply only when certain conditions exist or certain types of property are sold. There are two examples of reporting installment sale income on Form 6252 near the end of the publication.
If you sell your home or other nonbusiness property under an installment plan, you may need to read only the General Rules. If you sell business or rental property or have a like-kind exchange or other complex situation, also see the appropriate discussion under Other Rules, later.
taxmap/pubs/p537-000.htm#en_us_publink10001146

Comments and suggestions.(p2)


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We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service 
Individual Forms and Publications Branch 
SE:W:CAR:MP:T:I 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at *taxforms@irs.gov. (The asterisk must be included in the address.) Please put "Publications Comment" on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p537-000.htm#en_us_publink10001147

Ordering forms and publications.(p2)
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Visit www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.

 
Internal Revenue Service 
1201 N. Mitsubishi Motorway 
Bloomington, IL 61705-6613


taxmap/pubs/p537-000.htm#en_us_publink10001148

Tax questions.(p2)
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If you have a tax question, check the information available on www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

taxmap/pubs/p537-000.htm#TXMP2f18686e

Useful items

You may want to see:


Publication
 523 Selling Your Home
 538 Accounting Periods and Methods
 541 Partnerships
 544 Sales and Other Dispositions of Assets
 550 Investment Income and Expenses
 551 Basis of Assets
 925 Passive Activity and At-Risk Rules
Form (and Instructions)
 4797: Sales of Business Property
 6252: Installment Sale Income
See How To Get Tax Help near the end of this publication for information about getting publications and forms.
taxmap/pubs/p537-000.htm#en_us_publink10001149

What Is an 
Installment Sale?(p2)


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previous topic occurrence Installment Sale next topic occurrence

An installment sale is a sale of property where you receive at least one payment after the tax year of the sale.
taxmap/pubs/p537-000.htm#en_us_publink10001150

Sale of inventory.(p2)


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The regular sale of inventory is not an installment sale even if you receive a payment after the year of sale. See Sale of a Business under Other Rules, later.
taxmap/pubs/p537-000.htm#en_us_publink10001151

Dealer sales.(p2)


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Sales of personal property by a person who regularly sells or otherwise disposes of the same type of personal property on the installment plan are not installment sales. This rule also applies to real property held for sale to customers in the ordinary course of a trade or business. However, the rule does not apply to an installment sale of property used or produced in farming.
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Special rule.(p2)
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Dealers of time-shares and residential lots can treat certain sales as installment sales and report them under the installment method if they elect to pay a special interest charge. For more information, see section 453(l) of the Internal Revenue Code.
taxmap/pubs/p537-000.htm#en_us_publink10001153

Stock or securities.(p2)


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You cannot use the installment method to report gain from the sale of stock or securities traded on an established securities market. You must report the entire gain on the sale in the year in which the trade date falls.
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Installment obligation.(p2)


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The buyer's obligation to make future payments to you can be in the form of a deed of trust, note, land contract, mortgage, or other evidence of the buyer's debt to you.
previous pagePrevious Page: Publication 536 - Net Operating Losses (NOLs) for Individuals, Estates, and Trusts - How To Get Tax Help
next pageNext Page: Publication 537 - Installment Sales - General Rules
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication