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gross receipts in petitioner’s 1995 tax return.
OPINION
Realization and Recognition of Income
Section 1001(a) provides that the gain realized from the
sale of property shall be the excess of the amount realized over
the adjusted basis. The amount realized consists of “the sum of
any money received plus the fair market value of the property
(other than money) received.” Sec. 1001(b). If the taxpayer has
a realized gain (after the calculations of the amount realized
and adjusted basis), the taxpayer must generally recognize the
entire gain as income. See sec. 1001(c). The tax law, however,
provides that for certain sales of property the taxpayer can use
the installment method to defer recognition of income. See secs.
451(a), 453, 1001(c).
Under section 453(a), a taxpayer can use the installment
method only if there has been an installment sale. An
installment sale is 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). Using the
installment method, the taxpayer recognizes a proportion of the
payment received in any given year commensurate with the
percentage that the gross profit bears to the total contract
price. See sec. 453(c); Wang v. Commissioner, T.C. Memo 1998-
127; Berger v. Commissioner, T.C. Memo. 1996-76. Dealer
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