Posted by Jimmy on August 15, 2007 at 11:11:38:
Instalment sales are pretty easy to understand. the tax consequences are recognized over the period of time that note payments are received. first, you separate out the interest expense part of the payments. the remainder (the note principal payments) will be a combination of depreciation recapture income, capital gain and return of basis (if any). and the recognition of these incomes are spread over the life of the note.