Which statement is not true concerning installment contracts and unstated interest?
A)Unstated interest increases the sale price
B)Unstated interest results in income to the seller
C)The buyer is entitled to an interest deduction for paying unstated interest
D)Unstated interest sometimes must be taken into account even if a stated rate of interest is included in the sales contract

Question

Quizplus · Accepted Answer

Unstated interest does not increase the sale price; instead, it represents the portion of the installment payments that is treated as interest for tax purposes, separate from the principal amount of the sale.

Which Statement Is Not True Concerning Installment Contracts and Unstated