Installment sale taxes
In 1979 I sold a piece of real estate for more than 30 percent cash, and my income tax return was assessed $3,000 because all of tax on the capital gain was alleged to be due and payable in one year. I don't think I should have to pay a hefty penalty for not paying tax on income I won't receive until 1989.
The law on installment sales for 1979 leaves you liable for the full tax on the full capital gain because you took more than 30 percent as a down payment in an installment sale. Telling you what you might have done differently will not change the facts. However, the rules on installment sales have changed. Now, there is no limit on the percentage of down payment you can accept. You pay capital gain taxes on each year's installment. Under today's rules you would not be liable for the full tax in one year. For 1980, different rules apply before and after Oct. 19, and anyone with a similar situation should consult a tax adviser for a possible change in payment schedules. If you are considering an installment sale of real estate or other substantial assets, numerous other changes affect such sales, and you are advised to consult a tax attorney or CPA for all of the co nditions.