Have Finance Questions? Ask a Financial Expert Online.
Hello. My name is ***** ***** I'll be the Expert assisting you today. I look forward to helping you with your issue today. You have an installment sale agreement. An installment sale is a sale of property where you'll receive at least one payment after the tax year in which the sale occurs. You are required to report gain on an installment sale under the installment method. You only pay taxes on the portion of the proceeds you receive each year. The gain for each year of the installment period is calculated by taking the total gain over the contract price multiplied by the annual payment. Each payment generally consists of three parts: 1) interest income 2) return on basis and 3) gain on the sale. In each year payments are received the seller must include income in both the interest portion (ordinary income) and the part that is the gain on the sale (capital gain).
I hope I’ve provided the information you were seeking. If you are happy with my service, your 5-star rating at this time is most welcome. If you need more help, please let me know so l can continue to assist you.
I wanted to follow up and see if you had any further questions. If your question has been resolved I would appreciate your feedback rating so I receive credit for the response. Thank you
I wanted to follow up and see if you had any further questions. If you have questions I am happy to assist. If you have no further questions I would greatly appreciate your 5 star rating so I receive credit for my responses. Thank you.