Can a seller carry a second mortgage on the relinkquised property

[Daniel Dietz]

Hello All, 

I am new to the concept of 1031s and have a basic questions. I would be the buyer in this case, not the seller.

If the seller has a property that say is sold for 250K which he purchased for 150K. He has taken 50K of depreciation, so I think his basis would be 100K. If no 1031 he would be on the hook for Recapture Tax on 50K, and Capital Gains on 100K, right?

If buyer can get a loan for 80% or 200K and the seller carries a 2nd for 50K, how would that affect a possible 1031? Do all the figure just 'get reduced' by 20% (the amount of the second)..... meaning use a purchase from of 120K, depreciation of 40K and capital gains of 80K? I hope that makes sense.

IF that is the case, and the seller does a 1031 with the rest of it, would that mean recapture tax and capital gains tax would only be due on the 20% he is carrying a note on and the rest could be deferred with a 1031?

Thanks, Dan Dietz