Important Change

For sales occurring after December 16, 1999, accrual basis taxpayers were required to report installment sales under an accrual method of accounting. The Installment Tax Correction Act of December 28, 2000, repealed that requirement.

If you entered into an installment sale after December 16, 1999, and reported it under an accrual method on your income tax return filed by April 16, 2001, you can revoke your effective election not to use the installment method. To revoke the election, you must file an amended return for the year of the installment sale (and any other year affected by the sale) reporting the gain on the installment method. For more information, see Publication 537.

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