How is a partial 1031 taxed?

[Lori F.]

I was planning to buy 2 replacement properties as part of a 1031 exchange. Now one of the replacement property purchases may fall through. 

How would taxes be computed on a partial exchange, where I would be buying down in price (by about $200k) and then either A) taking a smaller mortgage than I had on the relinquished property and using all the sales proceeds or B) taking a larger mortgage but generating cash at closing? 

I guess what I'm asking is if it's possible that I'd have to pay taxes on the price difference plus the mortgage boot plus the cash boot.