The differences in the rules for computing taxable income and those for financial reporting often cause amounts to be included in taxable income in a year later—or earlier—than the year in which they are recognized for financial reporting purposes, or not to be included in taxable income at all. For example, you learned in Chapter 4 that income from selling properties on an installment basis is reported for financial reporting purposes in the year of the sale. But tax laws permit installment income to be reported on the tax return as it actually is received (by the installment method). This means taxable income might be less than accounting income in the year of an installment sale but higher than accounting income in later years when installment income is collected.