- 24 -
Petitioner did not report any income from the sale to the
Mynhiers on his Form 1040 for 1985.
OPINION
An installment sale is a disposition of property where at
least one payment is to be received after the close of the
taxable year in which the disposition occurs. Sec. 453(b).
Income from an installment sale shall be taken into account under
the installment method. Sec. 453(a). Under the installment
method, the income recognized for any taxable year from a
disposition is that proportion of the payments received in that
year which the gross profit bears to the total contract price.
Sec. 453(c). Respondent determined that petitioner recognized
$28,347 as income from the installment sale to the Mynhiers in
1985.14 Petitioner did not address this issue on brief, and he
conceded any arguments he might have made, but did not. We hold
that petitioner recognized $28,347 as income from the installment
sale in 1985.
Under section 453B(a), gain or loss shall be recognized on
the sale or exchange of an installment obligation to the extent
of the difference between the basis of the obligation and the
amount realized. The basis of an installment obligation shall be
14Respondent computed the installment gain in 1985 as
follows: Gross profit ($59,272) = sales price ($69,000) minus
selling expenses ($412) minus basis ($9,316); gross profit
percentage (0.859014) = gross profit ($59,272)/contract price
($69,000); income from installment sale ($28,347) = payments in
1985 ($33,000) x gross profit percentage (0.859014).
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: May 25, 2011