Installment Sales of Depreciable Property Which Result in Recaptured Income

question 9

True/False

Installment sales of depreciable property which result in recaptured income under Secs.1245 or 1250 require that the recaptured income be recognized in the year of sale.

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Definitions:

Note Receivable

An asset on the balance sheet representing money owed to the holder by a debtor, which includes an obligation to pay both the principal and interest.

Dishonoured

Refers to a financial instrument, such as a check or a bill, that is not paid upon presentation for settlement.

Maturity Value

The amount that will be received at the maturity date of an investment, including the principal and any accrued interest.

Note Receivable

A written promise that one party will pay another party a specified sum of money, either on demand or at a set future date.