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taxmap/pubs/p537-000.htm#en_us_publink1000221585
Publication 537

Installment Sales

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Future Developments(p1)

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For the latest information about developments related to Pub. 537, such as legislation enacted after it was published, go to IRS.gov/pub537.

Reminder(p1)

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Photographs of missing children.(p1)
The Internal Revenue Service (IRS) is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
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Preventing slavery and human trafficking.(p1)
Human trafficking is a form of modern-day slavery, and involves the use of force, fraud, or coercion to exploit human beings for some type of labor or commercial sex purpose. The United States is a source, transit, and destination country for men, women, and children, both U.S. citizens and foreign nationals, who are subjected to the injustices of slavery and human trafficking, including forced labor, debt bondage, involuntary servitude, "mail-order" marriages, and sex trafficking. Trafficking in persons can occur in both lawful and illicit industries or markets, including in hotel services, hospitality, agriculture, manufacturing, janitorial services, construction, health and elder care, domestic service, brothels, massage parlors, and street prostitution, among others.
The President’s Interagency Task Force to Monitor and Combat Trafficking in Persons (PITF) brings together federal departments and agencies to ensure a whole-of-government approach that addresses all aspects of human trafficking. Online resources for recognizing and reporting trafficking activities, and assisting victims include the Department of Homeland Security (DHS) Blue Campaign at DHS.gov/blue-campaign, the Department of State Office to Monitor and Combat Trafficking in Persons at State.gov/j/tip, and the National Human Trafficking Resource Center (NHTRC) at humantraffickinghotline.org. DHS is responsible for investigating human trafficking, arresting traffickers, and protecting victims. DHS also provides immigration relief to non-U.S. citizen victims of human trafficking. DHS uses a victim-centered approach to combat human trafficking, which places equal value on identifying and stabilizing victims and on investigating and prosecuting traffickers. Victims are crucial to investigations and prosecutions; each case and every conviction changes lives. DHS understands how difficult it can be for victims to come forward and work with law enforcement due to their trauma. DHS is committed to helping victims feel stable, safe, and secure.
To report suspected human trafficking, call the DHS domestic 24-hour toll-free number at 1-866-DHS-2-ICE (1-866-347-2423) or 1-802-872-6199 (non-toll-free international). For help from the NHTRC, call the National Human Trafficking Hotline toll free at 1-888-373-7888 or text HELP or INFO to BeFree (233733).

taxmap/pubs/p537-000.htm#en_us_publink1000272066Introduction

Note. Section references within this publication are to the Internal Revenue Code and regulation references are to the Income Tax Regulations under the Code.
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Installment sale.(p2)

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An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. If you realize a gain on an installment sale, you may be able to report part of your gain when you receive each payment. This method of reporting gain is called the installment method. You cannot use the installment method to report a loss. You can choose to report all of your gain in the year of sale.
This publication discusses the general rules that apply to using the installment method. It also discusses more complex rules that apply only when certain conditions exist or certain types of property are sold.
If you sell your home or other nonbusiness property under an installment plan, you may need to read only the General Rules. If you sell business or rental property or have a like-kind exchange or other complex situation, also see the appropriate discussion under Other Rules, later.
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Comments and suggestions.(p2)

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We welcome your comments about this publication and your suggestions for future editions.
You can send us comments from IRS.gov/formspubs. Click on "More Information" and then on "Give us feedback."
Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
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Ordering forms and publications.(p2)
Visit IRS.gov/formspubs to download forms and publications. Otherwise, you can go to IRS.gov/orderforms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.
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Tax questions.(p2)
If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

taxmap/pubs/p537-000.htm#TXMP36feff51

Useful items

You may want to see:


Publication
 523 Selling Your Home
 535 Business Expenses
 541 Partnerships
 544 Sales and Other Dispositions of Assets
 550 Investment Income and Expenses
 551 Basis of Assets
 4895 Tax Treatment of Property Acquired From a Decedent Dying in 2010
Form (and Instructions)
 Schedule A (Form 1040): Itemized Deductions
 Schedule B (Form 1040A or 1040): Interest and Ordinary Dividends
 Schedule D (Form 1040): Capital Gains and Losses
 Schedule D (Form 1041): Capital Gains and Losses
 Schedule D (Form 1065): Capital Gains and Losses
 Schedule D (Form 1120): Capital Gains and Losses
 Schedule D (Form 1120S): Capital Gains and Losses and Built-in Gains
 1040: U.S. Individual Income Tax Return
 1040NR: U.S. Nonresident Alien Income Tax Return
 1120: U.S. Corporation Income Tax Return
 1120-F: U.S. Income Tax Return of a Foreign Corporation
 4797: Sales of Business Property
 6252: Installment Sale Income
 8594: Asset Acquisition Statement Under Section 1060
 8949: Sales and Other Dispositions of Capital Assets
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What Is an Installment Sale?(p2)

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An installment sale is a sale of property where you receive at least one payment after the tax year of the sale.
The rules for installment sales do not apply if you elect not to use the installment method (see Electing Out of the Installment Method, later) or the transaction is one for which the installment method may not apply.
The installment sales method cannot be used for the following.
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Sale of inventory.(p2)

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The regular sale of inventory of personal property does not qualify as an installment sale even if you receive a payment after the year of sale. See Sale of a Business, later.
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Dealer sales.(p2)

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Sales of personal property by a person who regularly sells or otherwise disposes of the same type of personal property on the installment plan are not installment sales. This rule also applies to real property held for sale to customers in the ordinary course of a trade or business. However, the rule does not apply to an installment sale of property used or produced in farming.
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Special rule.(p2)
Dealers of time-shares and residential lots can treat certain sales as installment sales and report them under the installment method if they elect to pay a special interest charge. For more information, see section 453(l).
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Stock or securities.(p2)

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You cannot use the installment method to report gain from the sale of stock or securities traded on an established securities market. You must report the entire gain on the sale in the year in which the trade date falls.
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Installment obligation.(p2)

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The buyer's obligation to make future payments to you can be in the form of a deed of trust, note, land contract, mortgage, or other evidence of the buyer's debt to you.