It's a lease unless it's a sale.  Depends on facts and circumstances.  Here is one online explanation:

A lease with an option to purchase, also known as a "lease option," is a common real estate arrangement. The important income tax question in lease-option transactions is whether the tenant is leasing the property or, as an economic reality, an installment sale has occurred prior to the tenant exercising the purchase option.

The answer to this question depends upon an analysis of all the surrounding factors, because no single factor determines whether or not a lease option is, in economic reality, a sale. As Gerald J. Robinson, a noted tax authority, observed in the Federal Income Taxation of Real Estate, a determination includes studying many factors, "including the terms of the lease, the surrounding economic circumstances, and the intent of the parties....A collection of telltale signs leads to the conclusion that exercise of the option was virtually certain from the outset, so that treating the entire transaction as a sale is warranted."

If a lease option is treated as a sale, there are two important tax implications:

The timing of the transfer of ownership of the property is changed. With a "true" lease option, ownership transfers when the option is exercised. If the transaction is treated as a sale, then ownership transfers when the parties execute the original agreement. (For an examination of the tax consequences of a "true" lease option, see "Consider the Consequences of Your Options," CIREJ, Spring 1995, page 21.)
The nature of the option payment and the rent payments during the lease period are changed.
Because the tax treatment of a purchase transaction is so different from a lease transaction, it is important to understand the factors that may lead the Internal Revenue Service (IRS) to characterize a lease-option transaction as a sale.

https://www.ccim.com/cire-magazine/articles/lease-option-or-installment-sale/