You don't need to report the principal received on the loan payments. Loan principal repayments aren't taxable. Only the interest received represents taxable income while you own the property. If you were to rent the property, you would report the rental income and expenses, and depreciation on the property. You would only need to report the purchase price and sale price at such time as you sell the property.
See this article for information on imputed interest, if the interest paid is below the market rate.
See this thread for more information on reporting interest on a mortgage you hold. Technically, this isn't a seller-financed loan because the property isn't sold.
[Edited 03/08/23| 10:53am PST]
@larisat (edited)
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
