Tax Advice for a "Lease Option".

[Kim LeJeune]

Hi,

I have a house that is owned fully by me (no mortgage) that I created a lease option on with a lessee. The FMV is about 165k. I received a 15k down payment and am receiving monthly payments of $1578 for so many years. I pay the insurance. In the paperwork, I show that the lessee receives a small credit towards the purchase price. The credit per month increases over time...a type of amortization if you will. At the end of his lease, it will be paid on and he can "buy it". Can anybody advise me on how to treat this for tax purposes? If I've made mistakes with the structuring of this, please go easy on me, but if you have tips for next time, please do advise. I'm mainly concerned right now with how to handle this with my taxes. Thanks in advance.