An installment sale involves the sale of property where at least one payment is to be received after the close of the tax year in which the sale takes place. The installment method of accounting provides an exception to the general principle of recognizing income from the sale of an asset in the year in which the sale take place. Installment sales allow the taxpayer to defer the recognition of income until payment in cash or cash equivalents is received. Thus, many sellers of real estate or other assets who are required to report a taxable gain, sell the property utilizing seller financing so they can defer paying taxes for several years. In addition, many sellers of real estate and other assets are able to obtain higher prices as a result of offering seller financing.