That $479,000 is the deferred installment sale income, not an item of income tax. If it's the only installment sale item your client has, the de minimus exception under Sec. 453(A)(c) applies.

I have a client who has a bunch of pass-through installment sale income shown on K-1s; I have no reason to believe the K-1 presentation is incorrect based on the facts you've provided.