The tax treatment of this transaction depends on a number of factors - there is no "bright line" test for whether this was an installment sale or a true lease with an option to buy. If the lessee had a right to recover a portion of the rent had he chosen not to purchase the property, it would likely have been an installment sale.
Assuming the simplest case - it was a rental and you didn't receive any additional funds at closing - you can probably report it as a sale of rental property for $0. Your basis for calculating any loss or gain would be your original cost plus the cost of any improvements less depreciation claimed while a rental property.
The following post provides a detailed discussion of this issue. Be sure to select "See entire answer" if it appears.
https://ttlc.intuit.com/replies/4870039
