you first fill out the home sale worksheet. you have an installment sale, so if the gain is more than $500,000 or was ever a rental you link it to form 6252. otherwise don't bother becuase none of the gain is taxable. The interest receved each year is taxable and you can report it by using 1099-INT
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if the gain is more than $500K and was never a rental then only gain in excess of the $500,000 is taxable on the installment basis. so say gain in excess of exclusion was $200,000 and you received 20% of the proceeds in 2022 than only $40,000 of that is taxable in 2022 along with the interst received. the balance of the gain will be taxable each year based on the % of sales proceeds received
interest is always reported as ordinary income in year received and not included in the sales proceeds received.
