Seller Financing Multifamily - Implications for the Seller

[Mark Esperti]

I have several offers going out soon to landlords who own their multifamily free and clear or have 80%+ equity.  I intend to take down these deals with an owner-financed agreement.  The general target deal will be ~10% down and the balance financed over 25 year amortization with a balloon payment due at 5 or 7 years.  My question for all the great RE focused CPAs and tax strategists out there: Will the seller have a taxable event equal to the value of the purchase price for the year that the building trades?  Or will they be taxed just on the cashflow that I pay to them as the lender?  Assuming these are not owner-occupied sellers with 2+ years residence at the building. 

Any insight is appreciated!