All of the Following Taxpayers Can Use the Installment Method

question 15

Multiple Choice

All of the following taxpayers can use the installment method to report gains from the sale of assets except:

• A)A taxpayer who sells a parcel of land used in his trade or business.
• B)A taxpayer who sells land he inherited from his father five years ago.
• C)A taxpayer who sells a large piece of manufacturing equipment on which he took a Section 179 deduction for the total cost two years ago when purchased.
• D)A taxpayer who sells a building used in his trade or business for five years that was depreciated using straight-line depreciation.

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Definitions:

Earnings Per Share

A metric used to determine a portion of a company's profit allocated to each outstanding share of common stock, calculated as net income divided by the number of shares.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the gain from the investment by its cost.

EDGAR

The Electronic Data Gathering, Analysis, and Retrieval system used by the United States Securities and Exchange Commission (SEC) for the submission of corporate filings.