Introduction An installment sale is a sale of property where you receive atleast one payment after the close of the tax year of the sale. If youdispose of property in an installment sale, you report part of yourgain or profit when you receive each installment payment. You cannotuse the installment method to report a loss. The buyer's "installment obligation" to make future paymentsto you can be in the form of a deed of trust, note, land contract,mortgage, or other evidence of the buyer's debt to you. The rulesdiscussed in this chapter generally apply regardless of the form ofthe installment obligation.