A prior section 453, acts Aug. 16, 1954, ch. 736, 68A Stat. 154;
2004—Subsec. (f)(4)(B). Pub. L. 108–357 struck out “is issued by a corporation or a government or political subdivision thereof and” before “is readily tradable”.
2000—Subsecs. (a), (d)(1), (i)(1), (k). Pub. L. 106–573 repealed Pub. L. 106–170, § 536(a). See 1999 Amendment notes below.
1999—Subsec. (a). Pub. L. 106–170, § 536(a)(1), which substituted “Use of installment method” for “General rule” in subsec. heading, designated existing provisions as par. (1) and inserted heading, and added heading and text of par. (2), text of which read as follows: “(2)
Subsecs. (d)(1), (i)(1), (k). Pub. L. 106–170, § 536(a)(2), which substituted “(a)(1)” for “(a)” wherever appearing, was repealed by Pub. L. 106–573. See Effective Date and Construction of 2000 Amendment note below.
1988—Subsec. (f)(1). Pub. L. 100–647, § 1018(u)(25), substituted “subsections (g)” for “subsection (g)”.
Subsec. (f)(8). Pub. L. 100–647, § 1018(u)(26), substituted “payments to be” for “payment to be”.
Subsec. (g)(1). Pub. L. 100–647, § 1006(i)(2)(B), struck out “(within the meaning of section 1239(b))” after “between related persons”.
Pub. L. 100–647, § 1006(i)(1), added subpars. (A) to (C) and struck out former subpars. (A) and (B) which read as follows:
“(A) subsection (a) shall not apply, and
“(B) for purposes of this title—
“(i) except as provided in clause (ii), all payments to be received shall be treated as received in the year of the disposition, and
“(ii) in the case of any payments which are contingent as to amount but with respect to which the fair market value may not be reasonably ascertained—
“(I) the basis shall be recovered ratably, and
“(II) the purchaser may not increase the basis of any property acquired in such sale by any amount before such time as the seller includes such amount in income.”
Subsec. (g)(3). Pub. L. 100–647, § 1006(i)(2)(A), added par. (3).
Subsec. (h)(1)(B). Pub. L. 100–647, § 1006(e)(7)(A), substituted “to 1 person in 1 transaction” for “to one person” in concluding provisions.
Subsec. (h)(1)(E). Pub. L. 100–647, § 1006(e)(7)(B), substituted “section 368(c)” for “section 368(c)(1)”.
Subsec. (j). Pub. L. 100–647, § 1008(g)(1), redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k).
Subsec. (k). Pub. L. 100–647, § 2004(d)(5), struck out “and section 453A” after “subsection (a)” in second sentence.
Pub. L. 100–647, § 1008(g)(1), redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k).
Subsec. (l)(1)(A). Pub. L. 100–647, § 2004(d)(1), inserted “of the same type” after “disposes of personal property”.
1987—Subsec. (b)(2)(A). Pub. L. 100–203, § 10202(b)(1), substituted “Dealer dispositions” for “Dealer disposition of personal property” in heading and amended text generally. Prior to amendment, text read as follows: “A disposition of personal property on the installment plan by a person who regularly sells or otherwise disposes of personal property on the installment plan.”
Subsec. (l). Pub. L. 100–203, § 10202(b)(2), added subsec. (l).
1986—Subsec. (f)(1). Pub. L. 99–514, § 642(a)(3), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except for purposes of subsections (g) and (h), the term ‘related person’ means a person whose stock would be attributed under section 318(a) (other than paragraph (4) thereof) to the person first disposing of the property.”
Subsec. (f)(8). Pub. L. 99–514, § 642(b)(1), added par. (8).
Subsec. (g). Pub. L. 99–514, § 642(a)(1)(D), substituted “controlled entity” for “80-percent owned entity” in heading.
Subsec. (g)(1). Pub. L. 99–514, § 642(b)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of an installment sale of depreciable property between related persons within the meaning of section 1239(b), subsection (a) shall not apply, and, for purposes of this title, all payments to be received shall be deemed received in the year of the disposition.”
Subsec. (h). Pub. L. 99–514, § 631(e)(8)(C), substituted “certain liquidations” for “section 337 liquidations” in heading.
Subsec. (h)(1)(A). Pub. L. 99–514, § 631(e)(8)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If, in connection with a liquidation to which section 337 applies, in a transaction to which section 331 applies the shareholder receives (in exchange for the shareholder’s stock) an installment obligation acquired in respect of a sale or exchange by the corporation during the 12-month period set forth in section 337(a), then, for purposes of this section, the receipt of payments under such obligation (but not the receipt of such obligation) by the shareholder shall be treated as the receipt of payment for the stock.”
Subsec. (h)(1)(B). Pub. L. 99–514, § 631(e)(8)(A), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Subparagraph (A) shall not apply to an installment obligation described in section 337(b)(1)(B) unless such obligation is also described in section 337(b)(2)(B).”
Subsec. (h)(1)(E). Pub. L. 99–514, § 631(e)(8)(B), substituted “subsidiaries” for “subsidiary” in heading and amended text generally. Prior to amendment, subpar. (E) read as follows: “For purposes of subparagraph (A), in any case to which section 337(c)(3) applies, an obligation acquired in respect of a sale or exchange by the selling corporation shall be treated as so acquired by the corporation distributing the obligation to the shareholder.”
Subsec. (i)(2). Pub. L. 99–514, § 1809(c), substituted “section 1245 or 1250 (or so much of section 751 as relates to section 1245 or 1250)” for “section 1245 or 1250”.
Subsec. (j). Pub. L. 99–514, § 812(a), added subsec. (j) relating to current inclusion in case of revolving credit plans, etc.
1984—Subsec. (g). Pub. L. 98–369, § 421(b)(6)(C), struck out “spouse or” after “property to” in heading.
Subsec. (h)(1)(C). Pub. L. 98–369, § 421(b)(6)(B), inserted “married to each other or are”.
Subsec. (i). Pub. L. 98–369, § 112(a), amended subsec. (i) generally, substituting provisions relating to recognition of recapture income in year of disposition for provisions relating to application of subsec. (a) in the case of an installment sale of section 179 property.
1983—Subsec. (f)(6)(C). Pub. L. 97–448 inserted “, when used in any provision of this section other than subsection (b)(1),” after “the term ‘payment’ ”.
1981—Subsecs. (i), (j). Pub. L. 97–34 added subsec. (i) and redesignated former subsec. (i) as (j).
Pub. L. 108–357, title VIII, § 897(b),
Pub. L. 106–573, § 2, “(a) Subsection (a) of section 536 of the Ticket to Work and Work Incentives Improvement Act of 1999 (relating to modification of installment method and repeal of installment method for accrual method taxpayers) [Pub. L. 106–170, amending this section] is repealed effective with respect to sales and other dispositions occurring on or after the date of the enactment of such Act [“(b) The Internal Revenue Code of 1986 shall be applied and administered as if that subsection (and the amendments made by that subsection) had not been enacted.”
Pub. L. 106–170, title V, § 536(c),
Amendment by sections 1006(e)(7), (i)(1), (2), 1008(g)(1), and 1018(u)(25), (26) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Amendment by section 2004(d)(1), (5) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title.
Pub. L. 100–203, title X, § 10202(e), “(1) Except as provided in this subsection, the amendments made by this section [amending this section and sections 56, 381, 453A, and 691 of this title and repealing section 453C of this title] shall apply to dispositions in taxable years beginning after “(2) “(A) In the case of dealer dispositions (within the meaning of section 453(l)(1) of the Internal Revenue Code of 1986 as added by this section), the amendments made by subsections (a) and (b) [amending this section and repealing section 453C of this title] shall apply to installment obligations arising from dispositions after “(B) “(i) In the case of an applicable installment obligation arising from a disposition described in subclause (I) or (II) of section 453C(e)(1)(A)(i) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section) before “(ii) In the case of any taxpayer who is required by clause (i) to change its method of accounting for any taxable year with respect to obligations described in clause (i)—“(I) such change shall be treated as initiated by the taxpayer,“(II) such change shall be treated as made with the consent of the Secretary of the Treasury or his delegate, and“(III) the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period not longer than 4 taxable years.“(C) For purposes of this paragraph, rules similar to the rules of paragraphs (4) and (5) of section 812(c) of the Tax Reform Act of 1986 [Pub. L. 99–514, set out as an Effective Date of 1986 Amendment note below] (as added by the Technical and Miscellaneous Revenue Act of 1988 [Pub. L. 100–647]) shall apply.“(3) “(A) A taxpayer may elect, at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe, to have the amendments made by subsections (a) and (c) [amending sections 381, 453A, and 691 of this title and repealing section 453C of this title] apply to taxable years ending after “(B) Except as provided in subparagraph (A)—“(i) Section 453A(d) of the Internal Revenue Code of 1986 shall apply to any installment obligation which is pledged to secure any secured indebtedness (within the meaning of section 453A(d)(4) of such Code) after “(ii) For purposes of section 453C of such Code (as in effect before its repeal), the face amount of any obligation to which section 453A(d) of such Code applies shall be reduced by the amount treated as payments on such obligation under section 453A(d) of such Code and the amount of any indebtedness secured by it shall not be taken into account.“(C) If the taxpayer makes an election under subparagraph (A), in the case of the taxpayer’s 1st taxable year ending after “(i) dispositions after “(ii) subsections (b)(2)(B) and (c)(4) of section 453A of such Code shall be applied separately with respect to such dispositions by substituting for ‘$5,000,000’ the amount which bears the same ratio to $5,000,000 as the number of days after “(4) The amendment made by subsection (d) [amending section 56 of this title] shall apply to dispositions in taxable years beginning after “(5) The amendments made by this section shall not apply to any installment obligation or to any taxpayer during any period to the extent the amendments made by section 811 of the Tax Reform Act of 1986 [section 811 of Pub. L. 99–514, amending former section 453C of this title and enacting provisions set out as a note under former section 453C of this title] do not apply to such obligation or during such period.”
Amendment by section 631(e)(8) of Pub. L. 99–514 applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after
Amendment by section 642(a)(1)(D), (3), (b) of Pub. L. 99–514 applicable to sales after
Pub. L. 99–514, title VIII, § 812(c), “In the case of the: The applicable percentage is: 1st taxable year 15 2nd taxable year 25 3rd taxable year 30 4th taxable year 30.“(1) Except as provided in paragraphs (2) and (3), the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after “(2) Section 453(k)(2) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to sales after “(3) In the case of any taxpayer who made sales under a revolving credit plan and was on the installment method under section 453 or 453A of the Internal Revenue Code of 1986 for such taxpayer’s last taxable year beginning before “(A) such change shall be treated as initiated by the taxpayer,“(B) such change shall be treated as having been made with the consent of the Secretary,“(C) the period for taking into account adjustments under section 481 of such Code by reason of such change shall be equal to 4 years, and“(D) except as provided in paragraph (4), the amount taken into account in each of such 4 years shall be the applicable percentage (determined in accordance with the following table) of the net adjustment:If the taxpayer’s last taxable year beginning before “(4) “(A) If the percentage determined under subparagraph (B) for any taxable year in the adjustment period exceeds the percentage which would otherwise apply under paragraph (3)(D) for such taxable year (determined after the application of this paragraph for prior taxable years in the adjustment period)—“(i) the percentage determined under subparagraph (B) shall be substituted for the applicable percentage which would otherwise apply under paragraph (3)(D), and“(ii) any increase in the applicable percentage by reason of clause (i) shall be applied to reduce the applicable percentage determined under paragraph (3)(D) for subsequent taxable years in the adjustment period (beginning with the 1st of such subsequent taxable years).“(B) For purposes of subparagraph (A), the percentage determined under this subparagraph for any taxable year in the adjustment period is the excess (if any) of—“(i) the percentage determined by dividing the aggregate contraction in revolving installment obligations by the aggregate face amount of such obligations outstanding as of the close of the taxpayer’s last taxable year beginning before “(ii) the sum of the applicable percentages under paragraph (3)(D) (as modified by this paragraph) for prior taxable years in the adjustment period.“(C) For purposes of subparagraph (B), the aggregate contraction in revolving installment obligations is the amount by which—“(i) the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxpayer’s last taxable year beginning before “(ii) the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxable year involved.“(D) For purposes of this paragraph, the term ‘revolving installment obligations’ means installment obligations arising under a revolving credit plan.“(E) For purposes of subparagraphs (B)(i) and (C)(i), in determining the aggregate face amount of revolving installment obligations outstanding as of the close of the taxpayer’s last taxable year beginning before “(i) which was disposed of to an unrelated person on or before “(ii) was disposed of to an unrelated person on or after such date pursuant to a binding written contract in effect on For purposes of the preceding sentence, the term ‘unrelated person’ means any person who is not a related person (as defined in section 453(g) of the Internal Revenue Code of 1986).“(5) If 1 or more obligations arising under a revolving credit plan and taken into account under paragraph (3) are disposed of during the adjustment period, then, notwithstanding any other provision of law—“(A) no losses from such dispositions shall be recognized, and“(B) the aggregate amount of the adjustment for taxable years in the adjustment period (in reverse order of time) shall be reduced by the amount of such losses.“(6) For purposes of paragraphs (4) and (5), the adjustment period is the 4-year period under paragraph (3).”
Amendment by section 1809(c) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
Pub. L. 98–369, div. A, title I, § 112(b), “(1) Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply with respect to dispositions made after “(2) The amendments made by this section shall not apply with respect to any disposition conducted pursuant to a contract which was binding on “(3) The amendments made by this section shall not apply to any disposition before
Amendment by section 421(b)(6)(B), (C) of Pub. L. 98–369 applicable to transfers after
Pub. L. 97–448, title III, § 311(a),
Amendment by Pub. L. 97–34 applicable to property placed in service after
Pub. L. 96–471, § 6(a), “(1) Except as otherwise provided in this subsection, the amendments made by sections 2 [enacting this section and sections 453A and 453B of this title and amending sections 311, 336, 337, 381, former section 453, and sections 453B, 481, 644, 691, and 1255 of this title] and 5 [amending section 1239 of this title] shall apply to dispositions made after the date of the enactment of this Act [“(2) Section 453(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 2) shall apply to first dispositions made after “(3) Paragraphs (1) and (2) of section 453(h) of such Code (as amended by section 2) shall apply in the case of distributions of installment obligations after “(4) Section 453A of the Internal Revenue Code of 1986 (as amended by section 2) shall apply to taxable years ending after the date of enactment of this Act [“(5) Section 453B(f) of the Internal Revenue Code of 1986 (as amended by section 2) shall apply to installment obligations becoming unenforceable after the date of the enactment of this Act [“(6) The amendments made by section 2(c) [amending sections 336, 337, 453B, and former section 453 of this title] shall take effect as if included in the amendments made by section 403(b) of the Crude Oil Windfall Profit Tax Act of 1980 [see section 403(b)(3) of Pub. L. 96–223, set out as an Effective Date of 1980 Amendments note under section 337 of this title].“(7) In the case of any disposition made on or before the date of the enactment of this Act [“(A) paragraph (2) of such section 453(b), and“(B) any requirement that more than 1 payment be received.”
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after