Updated July 28, 2026. Quick answer: §453(d)(2) caps the election at “the due date prescribed by law (including extensions) for filing the taxpayer’s return … for the taxable year in which the disposition occurs.” And §453(d)(3) makes it revocable only with the consent of the Secretary. In practice it is a decision you make once, on a deadline, and cannot unwind.
Why you would elect out at all
The installment method defers gain, which is usually good. It is not always: if you expect rates to rise, if you have expiring losses to absorb the gain now, or if you want to avoid the §453A interest charge on a large obligation, taking the whole gain in year one can be the better answer.
The revocation door is narrower than ‘with consent’ suggests
Temp. Reg. §15a.453-1(d)(4) provides that a revocation “will not be permitted when one of its purposes is the avoidance of Federal income taxes, or when the taxable year in which any payment was received has closed.”
Read those two conditions together and almost every real-world revocation request is excluded. If you want to revoke, it is nearly always because the tax turned out worse than expected — which is the purpose the regulation names. Treat the election as final when you make it.
The default runs the other way
§453(a) applies the installment method unless you elect out. Doing nothing is a choice, and it is the choice to defer. That matters most for a sale with contingent consideration, where the default has consequences people do not expect.
Sources
IRC §453(a), (c), (d), (i); §453A(b), (c) and (d); Temp. Reg. §15a.453-1(c) and (d); §1060(a) and Treas. Reg. §1.1060-1(c) and (e); the asset classes at Treas. Reg. §1.338-6(b) as reproduced in the Instructions for Form 8594; §1042(a), (b), (c); §1202(a)(1) and (c)(1); §6621(a)(2). All read July 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.