While not practicing tax, you are correct on the installment sale portion (note over time); however, the current proceeds would bear some capital gains tax for sure. You might take some of the 80% and spread over 3-5 years as a non-compete agreement. or a consulting contract, or over-market rate salary. Turns capital gain into ordinary income, but shift the tax liability out into the future. Talk to a seasoned tax practitioner.

Agree with ^[redacted]‌, seller finance is taxed when received, and the other two suggestions are weighing the tradeoff between capital gains vs. ordinary, tax timing, net present value of investment income differences. One other question, how much depreciation recapture tax is he facing? This is taxed at ordinary income rates and payable in the period of the sale. You could possibly work with the seller on adjusting the FF&E allocation in order to reduce that component. Also, depending on the size of the transaction, the seller may want to check into a deferred sales trust or a monetized installment sale (generally need about a million in proceeds to make feasible).

Need more facts - GAAP and tax basis balance sheet and purchase price. Seller cannot defer ordinary income, only capital gains. If we assume the tax advisor is right, my guess is that the target is cash basis taxpayer and has section 1245 recapture for fixed and intangible assets. (Have seen this fact pattern before.)

I am an M&A Broker, not CPA. Recapture of depreciation is Ordinary Income. As Robert Shefferly said OI tax cannot be deferred. So, if target CPA is correct, you must have more or less 100% of the price as recapture, meaning all assets are highly, or fully under current tax laws, depreciated and purchase price is more or less equal to value of fixed assets plus WC with no or minimal goodwill. You could explore reducing allocation to fixed assets and move the difference to goodwill. Very likely this will have small, if any. impact on your cash flow.
Another option. Explore making 20% an earn-out that is a no-brainer to achieve.

ask your accountant to dig deeper with you for how does purchase price allocation impact seller tax as well. intangible assets ie goodwill is cap gains and better for seller & 'worse' for you in terms of amort schedule..this should help