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use the installment method to report gains from sales of this
property. In 1990, petitioner and Mrs. Wang engaged in the same
type of sales activity as EIC with property held in their own
names. Like EIC, the Wangs elected to report gains on the
installment method.
The installment sales provisions are contained in section
453. Section 453(a) permits a taxpayer to report income from an
"installment sale" under the "installment method." Under the
"installment method", a proportionate amount of income is
recognized in the year when a payment is received. Sec. 453(c).
An "installment sale" is defined as a "disposition of
property where at least 1 payment is to be received after the
close of the taxable year in which the disposition occurs." Sec.
453(b)(1). However, an "installment sale" does not include a
dealer disposition of property. Sec. 453(b)(2)(A). A dealer
disposition includes a disposition of real property which is held
by the taxpayer in the ordinary course of his trade or business.
Sec. 453(l)(1)(B)5. The sale of a residential lot in the
5Sec. 453(l) defines the term "dealer disposition" for the
purposes of the installment sales rules. That section provides
in part:
(l) Dealer Dispositions.--For purposes of
subsection (b)(2)(A)--
(1) In general.--The term "dealer
disposition" means any of the following
dispositions:
(continued...)
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