Transcript
Sam (0:00)
Foreign.
Matt Foreman (0:10)
Welcome to the 35th episode of How Tax Works. I'm Matt Foreman. In this episode, I'll discuss the installment method under section 453 of the Internal Revenue Code. Obviously not as exciting. I don't know of a topic as AI and tax. I, you know, I. I think it's a pretty interesting one. It's definitely one that's worth, you know, you run into it a lot. Um, obviously the, you know, we're back to the original music, but we farmed out the music. See how AI would rein. Imagine the music, which it was. One was kind of jazzy, funky, you know, just sort of a little bit of a remix. Um, we actually got one and I am. I am not exaggerating this here. Someone did it with rap. Pretty sure it's AI rap. It sounds like a voice, but I. I can't tell. I don't really care enough to like inquire. And it's pretty funny either way. But if you would like to hear it just after this episode, we're just going to put it on the end. It's only like a minute or so and it has lyrics that. Boy howdy. There's something is how I'm going to describe it. I don't know how else to explain it. I do listen, you know, pretty broad array of music. I do. I do like hip hop and rap. But this is something is how I'll describe it. Even if you don't like rap, I highly recommend listening to it, if only for the comedic value. But anyway, anyway, How Tax Works is meant for informational entertainment purposes only. This may be attorney advertising and it is not legal advice. Please hire your own attorney. How Tax Works is intended to help listeners navigate the intricacies and complexities of tax law, regulations, case law, and guidance to demystify how taxes shape the financial and business decisions we all make. Before we get started, a few administrative things. New episodes every two weeks. Um, I know I did two, the last one, but that was kind of one episode and two parts, so thought it made more sense just to pop them both out at once. Next episode, which will be 36, talk about the grouping rules under section 469. Also pretty similar to the grouping rules under 199 Cap A and elsewhere in the code. So definitely worth worth discussing and interesting. 465 as well. I'll explain what all that stuff is. Don't worry. If you have any questions, comments, or constructive criticism, you can email me at my FRB email address. I have some upcoming webinars that That I think are interesting. They're free so if you want to do it. The Advanced Tax Strategies series. I didn't name it but you know, good enough. They're all Thursdays 1 o', clock, one post Meridian Eastern time. I live in, I live in New York so. So I'm doing everything eastern. No, there are four Thursdays in November and December hour each free CPE for CPAs, CE for easy, CLE for attorneys and CFP. So if you're a CFP you can get continuing as well Short chart titles here. There's more information on the FRB website on the How Tax Works landing page. But November 6th is 704C allocations which I think is a sleepy area that I think to be candid I think people get wrong and don't understand and don't understand when it doesn't matter. So definitely an interesting one. November 20th succession planning at the margins using profits, interest something I do a Fair amount of December 4th is stock, sales, taxes, asset sales, talking about every orgs through 38h10 etc. Etc. Etc. Or yada yada yada however you want to say it. And December 18th changes to QSBS under OB thrice often called Public Law 11921 O triple B obbba. I like OB thrice. It's good for the reference. Anyway, so let's talk about the installment method under section 453 installment sales. What is an installment sale? An installment sale defers gain to when the seller receives the payment. It requires actual or constructive receipt and the payment can be in cash or other property. You can't use it to defer losses. So if you sell loss property, the losses just get recognized in year one even if you didn't receive the cash. So. So that's good. If you sell five assets and two are losses and two are gains, it won't defer the losses, it will defer the gains. So that's actually kind of a very taxpayer friendly way to do it.