Sale of main home on contract

[taxjungle]

Client sold main home that qualifies for Sec 121 exclusion on an Installment Sale. My question is: Is the interest income part of each installment payment included in income each year received, or does the interest also qualify for the Sec 121 exclusion? Even with the interest income the client is far below the $250,000 exclusion amount. I've researched it, but cannot find any information about the interest income for a Section 121 home.
Please advise me. Thank you very much.

[geekgirldany]

Take a look at Pub 523, pages 19 & 20. It discusses seller financed mortgage and installment sale.

[Burke]

Client sold main home that qualifies for Sec 121 exclusion on an Installment Sale. My question is: Is the interest income part of each installment payment included in income each year received, or does the interest also qualify for the Sec 121 exclusion? Even with the interest income the client is far below the $250,000 exclusion amount. I've researched it, but cannot find any information about the interest income for a Section 121 home.
Please advise me. Thank you very much.

Interest is on the note, not the home. It is taxable and reported on Sche B every year.

[taxjungle]

Interest is on the note, not the home. It is taxable and reported on Sche B every year.

Thank you both for your help!