I sold a home I inherited to my son and holding the mortgage. Do I need report this years "principal" payments as income or just the interest?

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Only the interest portion of a mortgage payment is taxable income. The principal portion of the payment is the gradual repayment of the loan amount. Repayment of a loan is not taxable income.

I am assuming that you have already accounted for the actual sale of the home, and calculated any applicable capital gain or loss on the sale. For IRS guidance on this topic, please refer to https://www.irs.gov/faqs/interest-dividends-other-types-of-income/gifts-inheritances/gifts-inheritan...