Installment Sale Law and Legal Definition
An installment sale is a conditional sale in which the buyer pays the purchase price in installments rather than one single payment. The seller retains the title or security interest until s/he receives full payment.
Installment sale allows partial suspension of capital gain to future taxation years. At least one payment is to be received after the close of the taxable year in which the sale occurred. However, the buyer must make regular payments on an annual basis, together with interest when installment payments are to be made in subsequent taxation years.