Tax Implications of Balloon Payment?

[Andrew Taylor]

We sold a property last year and are carrying the note. Buyer has been making monthly payments and is due to make the balloon payment in a few months. I'm wondering what the tax implications are for both the payments I've collected, and the balloon payment when I receive it.

If it matters, the property was our primary residence at the time of sale. I assume I need to declare the interest collected on my personal tax return, but I'm unsure of how to handle the sale proceeds when I collect the balloon. We're planning to pay some debts with the money and invest the rest.

Thanks in advance for your advice (and my apologies in advance if the mobile app removed all the line breaks and made this one huge paragraph).