Seller (Owner) Financing - Couple Questions

[Archie Minkowski]

We have a home in a desirable area and a couple of folks have asked if we'd consider owner financing, so we're considering it.  We would obviously ask for a down payment, proof of income, and proof of insurance.   We'd offer the home at market rate interest or just slightly higher.  

1). How are taxes handled?  

2). Monthly payments. How do we amortize the deal?  Does all of the money go to the principal, or is it counted as "interest only" for a time?

3). Is there a way for us to sell the note down the road and exit the deal?  

Greatly appreciate any wisdom.