If an Installment Sale Contract Does Not Charge Interest on the Sale

question 24

True/False

If an installment sale contract does not charge interest on the sale of a capital asset, the IRS will impute interest and thereby increase the taxpayer's capital gain and interest income.

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Definitions:

Method of Substitution

A strategy for solving systems of equations by replacing variables with equivalent expressions to simplify the system.

System of Equations

A set of two or more equations with the same variables.

Method of Elimination

A technique used in solving systems of equations where one variable is eliminated by adding or subtracting the equations.

System of Equations

A set of two or more equations with the same variables, solved together to find common solutions.