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installment method. Sec. 453(a). An installment sale
constitutes a sale under which at least one payment is to be
received after the close of the year in which the sale occurs.
Sec. 453(b)(1). For the years before us, the installment method
of reporting income relating to an installment sale generally
applies, unless the taxpayer elects otherwise. Sec. 453(d)(1).
Petitioner acknowledges that evidence regarding the sale of
Mr. Makalintal’s 2 million shares of ICPI stock is incomplete but
she argues, among other things, that no evidence indicates that
Mr. Makalintal’s purported sale of his ICPI stock for $3 million
was actually consummated or that Mr. Makalintal actually received
any portion of the $3 million stated sales price. Further,
petitioner argues that under the written installment sales
agreement between Mr. Makalintal and Mr. de Los Angeles, any
income to be charged to Mr. Makalintal with regard to the
purported sale of the ICPI stock should qualify for installment-
sale treatment under section 453 and that (because none of the
sales proceeds was scheduled to be received in 1986) none of the
income relating to the sale should be taxable in 1986.
Petitioner also disputes respondent’s bank deposits analyses for
1987 and 1988.
As explained, respondent takes the position that because of
the inadequacy of the evidence relating to the sale,
Mr. Makalintal’s sale of ICPI stock for a stated $3 million
should be treated as fully taxable to Mr. Makalintal in 1986.
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