Congress Repeals Tax Provision
The Installment Sales Correction Act, sponsored by Ways and Means Committee members Wally Herger (R-CA) and John Tanner (D-TN), will reinstate the installment method of accounting for accrual basis taxpayers. This will then allow sellers of small businesses to recognize taxable income as payments are made, instead of paying all the capital gains in the year of the sale.
“By requiring small business owners to pay all the taxes due from a business sale up front in the year of the sale, even if the money is received in installments over the course of several years, Congress and the White House have discouraged owner financing and stunted the ability of prospective buyers to purchase businesses,” said John Saucier, chairman of ACCA’s Government Relations Task Team and president of Memphis-based Temperature, Inc.
Publication date: 12/25/2000