Sale contract before 1 year but collect funds after 1 year tax?

[David C.]

If you build a new house, and rent it out with a 1 to 1.5 year lease, and the buyer is renting to own, but the sale takes place after the lease ends, is this treated as income or as a capital gain?  Would the rental payments prior to sale be treated as income and then the actual sale after 1 year (most of the amount) treated as capital gain?  Or do you have to treat the entire price as income because the contract was established before the 1 year period elapsed?

Separately, if the buyer has an option to buy, but not contract, and option is exercised after 1 year, is that a capital gain?