Taxpayers that dispose of certain property where at least 1 payment is to be received after the close of the taxable year in which the disposition occurs (installment sales) can account for the income from the disposition under the installment method in section 453. Under the installment method the taxpayer pays tax on installment sale income as installment payments are received, thus deferring some or all of the tax liability to a later year. For installment sales in excess of $150,000, section 453A requires taxpayers to pay interest on the deferred tax liability that results from the use of the installment method. These proposed regulations will provide rules under section 453A(c) to compute the interest on the deferred tax liability for installment sales involving contingent payments.