PUBLIC LAW 100-203—DEC. 22, 1987
101 STAT. 1330-389
"(B) REAL PROPERTY.—Any disposition of real property which is held by the taxpayer for sale to customers in the ordinary course of the taxpayer's trade or business. "(2) EXCEPTIONS.—The term 'dealer disposition' does not include— •Hm'^
"^^^ FARM PROPERTY.—The disposition on the installment
plan of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e) (4) or (5)). "(B) TiMESHARES AND RESIDENTIAL LOTS.— "(i) IN GENERAL.—Any dispositions described in clause (ii) on the installment plan if the taxpayer elects to have paragraph (3) apply to any installment obligations which arise from such dispositions. An election under this paragraph shall not apply with respect to an installment obligation which is guaranteed by any person other than an individual.
"(ii) DISPOSITIONS TO WHICH SUBPARAGRAPH APPLIES.—
A disposition is described in this clause if it is a disposition in the ordinary course of the taxpayer's trade or business to an individual of— "(I) a timeshare right to use or a timeshare ownership interest in residential real property for not more than 6 weeks per year, or a right to use specified campgrounds for recreational purposes,
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"(II) any residential lot, but only if the taxpayer (QJ. g^jjy related person) is not to make any improvements with respect to such lot. For purposes of subclause (I), a timeshare right to use (or timeshare ownership interest in) property held by the spouse, children, grandchildren, or parents of an individual shall be treated as held by such individual. "(C) CARRYING CHARGES OR INTEREST.—Any
carrying
charges or interest with respect to a disposition described in subparagraph (A) or (B) which are added on the books of account of the seller to the established cash selling price of the property shall be included in the total contract price of the property and, if such charges or interest are not so included, any payments received shall be treated as applying first against such carrying charges or interest. "(3) PAYMENT OF INTEREST ON TIMESHARES AND RESIDENTIAL LOTS.—
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"(A) IN GENERAL.—In the case of any installment obligation to which paragraph (2)(B) applies, the tax imposed by this chapter for any taxable year for which payment is received on such obligation shall be increased by the amount of interest determined in the manner provided under subparagraph (B). "(B) COMPUTATION OF INTEREST.—
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"(i) IN GENERAL.—The amount of interest referred to in subparagraph (A) for any taxable year shall be determined— "(I) on the amount of the tax for such taxable year which is attributable to the payments received during such teixable year on installment obligations to which this subsection applies.
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