Use your favorite search engine to find the IRS’ website and locate Publication

Question

Use your favorite search engine to find the IRS’ website and locate Publication 537: “Installment Sales.” After reviewing that publication, answer the following questions: 1. Which form is used to report an installment sale? 2. What are the requirements to report a sale on the installment basis for tax purposes? 3. If the taxpayer receives money over several periods, why would a taxpayer want to report a sale on the installment basis, rather than in the tax period when the sale originated? 4. How would you advise your tax client whether or not to elect the installment method? That is, what factors would you incorporate in that recommendation? Provide specific details to support your opinions in your response.

Explanation / Answer

1. Generally, Form 6252 will use to report installment sale income from casual sales of real or personal property during the tax year. also will have to report theinstallment sale income on Schedule D (Form 1040), Capital Gains and Losses, or Form 4797, or both.

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