installment sale

An installment sale is the term used by the United States government to account for products sold on payment plans, where the total income for the sale of a product is not reached for a given time period. Keeping track of this type of financial transaction is extremely important for the accuracy of taxes. For instance, if company that sells a product such as a car or television for an initial payment smaller than the actual cost, the taxes on the income for the product will be deferred until the full number of payments for the product have been received by the company.

Fast Facts

A company is not forced to defer their income taxes for installment sales in this manner.
Installment sales often profit the company more than a complete instant sale.

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Capital Gain Tax on Investment Property

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Financing A Home

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