Definition: For federal tax purposes, a sale in which at least one payment is received after the tax year of sale, subject to rules and exclusions governing installment reporting.
Example
An owner receives a down payment this year and qualifying sale payments in later years.
Keep the distinction clear
Interest is generally accounted for separately from sale proceeds. Not every deferred payment qualifies for installment gain reporting, and depreciation recapture has special treatment.
Related terms
Capital Gain · Adjusted Basis · Interest
Keep studying
References: IRS Topic 705: installment sales
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