Monetized Installment Sales Are Abusive Tax Transactions

Earlier this year, the IRS identified monetized installment sales—convoluted transactions involving a loan used to defer gain on the sale until a principal balloon payment is received—as one of its annual Dirty Dozen Tax Scams. Now, proposed regulations designated monetized installment sales as an abusive transaction. What this means: special reporting to the IRS is required and extra scrutiny will be applied to determine if intended tax results will be allowed. #IdeaoftheDay