Use this button to switch between dark and light mode.

You’re Going to Disclose Everything to Me! Monetized Installment Sales under the IRS’s Microscope

August 22, 2023 (3 min read)

The IRS formally proposed rules targeting a type of monetized installment sale as a potential tax avoidance deal that would require participants and material advisers to provide additional reporting under the threat of penalty. The IRS says that the sole economic reason for engaging in this type of transaction, where a cash payment for the sale of property is monetized to be paid in installments, is to pay direct and indirect fees to the "intermediary and the purported lender in an amount that is substantially less than the federal tax savings purportedly achieved from using Section 453 [installment rules] to defer the realized gain on the sale." Buyer beware!

Read now »

Related Content

  • Tax Shelter Transactions: Penalties and Disclosure Requirements
    Learn more about the types of transactions that a taxpayer is required to disclose to the IRS based on their perceived abusive nature. This practice note explores the required form to make such disclosure and the penalties which can be imposed for failure to properly disclose such transactions. 
  • Installment Sales: Taxation
    See how installment sales are taxed. IRC § 453 and regulations set forth the requirements for an installment sale. In general, an installment sale occurs upon the disposition of property where at least one payment is received after the close of the taxable year in which the disposition occurs.  

Practical Guidance Updates 
Featuring the latest updates from your Practical Guidance account.  


Experience results today with practical guidance, legal research, and data-driven insights—all in one place.

Experience Lexis+