Treasury Regulations (26 C.F.R.)
26 CFR § 1.453A-3
Requirements for adoption of or change to installment method by dealers in personal property.
# (a) In general.
A dealer (within the meaning of § 1.453A-1(c)(1)) may adopt or change to the installment method for a type or types of sales on the installment plan (within the meaning of § 1.453A-1(c)(3) and (d)) in the manner prescribed in this section. This section applies only to dealers and only with respect to their sales on the installment plan.
# (b)
Time and manner of electing installment method reporting—(1) Time for election. An election to adopt or change to the installment method for a type or types of sales must be made on an income tax return for the taxable year of the election, filed on or before the time specified (including extensions thereof) for filing such return.
(2) Adoption of installment method. A taxpayer who adopts the installment method for the first taxable year in which sales are made on an installment plan of any kind must indicate in the income tax return for that taxable year that the installment method of accounting is being adopted and specify the type or types of sales included within the election. If a taxpayer in the year of the initial election made only one type of sale on the installment plan, but during a subsequent taxable year makes another type of sale on the installment plan and adopts the installment method for that other type of sale, the taxpayer must indicate in the income tax return for the subsequent year that an election is being made to adopt the installment method of accounting for the additional type of sale.
(3) Change to installment method. A taxpayer who changes to the installment method for a particular type or types of sales on the installment plan in acordance with this section must, for each type of sale on the installment plan for which the installment method is to be used, attach a separate statement to the income tax return for the taxable year with respect to which the change is made. Each statement must show the method of accounting used in computing taxable income before the change and the type of sale on the installment plan for which the installment method is being elected.
(4) Deemed elections. A dealer (including a person who is a dealer as a result of the recharacterization of transactions as sales) is deemed to have elected the installment method if the dealer treats a sale on the installment plan as a transaction other than a sale and fails to report the full amount of gain in the year of the sale. For example, if a transaction treated by a dealer as a lease is recharacterized by the Internal Revenue Service as a sale on the installment plan, the dealer will be deemed to have elected the installment method assuming the dealer failed to report the full amount of gain in the year of the transaction.
# (c) Consent.
A dealer may adopt or change to the installment method for sales on the installment plan without the consent of the Commissioner. However, a dealer may not change from the installment method to the accrual method of accounting or to any other method of accounting without the consent of the Commissioner.
# (d) Cut-off method for amounts previously accrued.
An election to change to the installment method for a type of sale applies only with respect to sales made on or after the first day of the taxable year of change. Thus, payments received in the taxable year of the change, or in subsequent years, in respect of an installment obligation which arose in a taxable year prior to the taxable year of change are not taken into account on the installment method, but rather must be accounted for under the taxpayer's method of accounting in use in the prior year.
# (e) Effective date.
This section applies to sales by dealers in taxable years ending after October 19, 1980, but generally does not apply to sales made after December 31, 1987. For sales made after December 31, 1987, sales by a dealer in personal or real property shall not be treated as sales on the installment plan. (However, see section 453(l)(2) for certain exceptions to this rule.) For rules relating to sales by dealers in taxable years ending before October 20, 1980, see 26 CFR 1.453-7 and 1.453-8 (rev. as of April 1, 1987).
[T.D. 8269, 54 FR 46375, Nov. 3, 1989]
Source: view the official text
In this part (40 sections)
- 1.448-1T · Limitation on the use of the cash receipts and disbursements…
- 1.448-2 · Limitation on the use of the cash receipts and disbursements…
- 1.448-3 · Nonaccrual of certain amounts by service providers.
- 1.451-1 · General rule for taxable year of inclusion.
- 1.451-2 · Constructive receipt of income.
- 1.451-3 · Timing of income inclusion for taxpayers with an applicable…
- 1.451-4 · Accounting for redemption of trading stamps and coupons.
- 1.451-6 · Election to include crop insurance proceeds in gross income…
- 1.451-7 · Election relating to livestock sold on account of drought.
- 1.451-8 · Advance payments for goods, services, and certain other items.
- 1.453-1 - 1.453-2 · §§ 1.453-1-1.453-2 [Reserved]
- 1.453-3 · Purchaser evidences of indebtedness payable on demand or…
- 1.453-4 - 1.453-8 · §§ 1.453-4-1.453-8 [Reserved]
- 1.453-9 · Gain or loss on disposition of installment obligations.
- 1.453-10 · [Reserved]
- 1.453-11 · Installment obligations received from a liquidating…
- 1.453-12 · Allocation of unrecaptured section 1250 gain reported on the…
- 1.453A-0 · Table of contents.
- 1.453A-1 · Installment method of reporting income by dealers on…
- 1.453A-2 · [Reserved]
- 1.453A-3 · Requirements for adoption of or change to installment method…
- 1.454-1 · Obligations issued at discount.
- 1.455-1 · Treatment of prepaid subscription income.
- 1.455-2 · Scope of election under section 455.
- 1.455-3 · Method of allocation.
- 1.455-4 · Cessation of taxpayer's liability.
- 1.455-5 · Definitions and other rules.
- 1.455-6 · Time and manner of making election.
- 1.456-1 · Treatment of prepaid dues income.
- 1.456-2 · Scope of election under section 456.
- 1.456-3 · Method of allocation.
- 1.456-4 · Cessation of liability or existence.
- 1.456-5 · Definitions and other rules.
- 1.456-6 · Time and manner of making election.
- 1.456-7 · Transitional rule.
- 1.457-1 · General overviews of section 457.
- 1.457-2 · Definitions.
- 1.457-3 · General introduction to eligible plans.
- 1.457-4 · Annual deferrals, deferral limitations, and deferral…
- 1.457-5 · Individual limitation for combined annual deferrals under…