An installment sale allows:

A Immediate recognition of all gain

B Spreading gain recognition over the payment period as payments are received

C Tax-free treatment

D Deferring principal payments

✓ Correct Answer: Option B

Installment method (§453): recognize gain proportionally as payments received. Each payment = return of basis + gain portion.

💡 Why is B) the correct answer?

The correct answer to the question "An installment sale allows:" is Option B: Spreading gain recognition over the payment period as payments are received.

The other options — A) Immediate recognition of all gain, C) Tax-free treatment, D) Deferring principal payments — are incorrect for this CPA Exam Prep question. As explained above: Installment method (§453): recognize gain proportionally as payments received. Each payment = return of basis + gain portion.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Regulation (REG) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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An installment sale allows:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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