Dealer may have one of the following meanings, depending the context of the term:

1. a merchant who regularly engages in the purchase and resale of securities to customers. Stocks, bonds, and other financial instruments are considered inventory and are not subject to capital gain or loss treatment for a dealer.

2. a person who buys and sells from his or her own account. The number of sales necessary for dealer status may be low (e.g., three or four sales for a real estate dealer). The merchandise is inventory; consequently, any gain on the sale is ordinary income.

3. a person who regularly sells or otherwise disposes of personal property on the installment plan, or who disposes of real property- that is held by the taxpayer for sale to customers in the ordinary course of the taxpayer's trade or business. A dealer may not use the installment method on certain sales. Former IRC (check if this IRC provision is current here) §453(1)(1).

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.






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