Quick summary: a person sold their business for a total of 100k.  They only received 80k and the remainder of the 20k will be paid in installments (seller finance).  I came across different opinions on how this is done on a tax return and I would love your input on the issue.  My initial thought was that the person should include the total amount for the sale of the business and then in the following years they will include the interest received from the installments.  I've also read that the gains can be spread out also: the person should include only 80k (the money received for the year) and then each year the installment agreement should include 1.interest income, 2.return on basis, 3.gain on the sale.  

So please, any feedback is valuable and greatly appreciated.

Thank You