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Home Resources Glossary Installment Sale

Glossary

Installment Sale

When the purchaser of a business pays the seller over several years, allowing the tax liability on any gain to be spread over the same period of time instead of all in the year of the sale.

See Also

Seller financing.

Tips

The rules for installment sales do not apply if you elect not to use the installment method or if the transaction is one for which the installment method may not apply.

Related Resources

Small Business Acquisition Financing

M&A Seller Financing: A Complete Guide

M&A Seller Financing: Third-Party Loan Servicing

M&A Seller Financing: Handling a Buyer Default

Can I sell my business for all cash?

Related Terms

Indemnification

A provision in the purchase agreement that allows a buyer to seek recourse against the seller for losses suffered due to breaches of representations and warranties (reps & warranties). See...

Initial Public Offering (IPO)

The first public sale of the stock of a formerly privately held company. Tips Companies are said to “go public” when they cease to be completely privately owned by offering...

Intellectual Property (IP)

A business’ legally protectable intangible assets, including patents, copyrights, trade names, domain names, trade secrets, and trademarks or service marks. See Also Trademark. Tips Intellectual property (IP) can include both...

Internal Rate of Return (IRR)

The interest rate, which is applied to a stream of cash flows, that causes the sum of the outflows and inflows to equal zero. See Also Hurdle rate, private equity...

Internal Transfer

A sale of a business to an insider, such as a family member, an employee, or partner. See Also Buy-sell agreement, external transfer, ESOP Example The sale of a business...

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