Owner Financing Transactions & Capital Gains Tax Impact

[Cary F.]

Hello BP Community,

I am wondering if there is a tax advantage for an investor selling an investment property to another investor through owner financing.

So instead of the seller listing and subsequently selling a NOO property and paying capital gains tax, they carry the note for the current buyer.

(This is a scenario where a seller doesn't wan't to reinvest the money from the sale into a 1031 exchange transaction.) 

Is this a black and white issue? Or does it make sense to unload properties and carry the note when considering the tax liabilities. 

Thanks,

Cary