Self directed IRA - purchase note

[Adam Roberts]

Team -

I have a home that I recently owner-financed out to a buyer on a 15 year note, and I would like to entertain the idea of "purchasing" the note with a self-directed IRA. Currently the note is owned by my LLC, and my self-directed IRA is owned by "me". Assuming this is even possible, I have the two following, very-broad questions -

A - If the buyer re-fi's out of his loan in a number of years, how does this work with the IRA? Is the principal balance simply placed back into the IRA?

B - There is a $10K profit involved with the purchase and sale of the subject home (I sold to buyer for $10K higher than I purchased), when my IRA "buys" the note, can I 1031 exchange that $10K profit into another investment, or will I be required to pay capital-gains tax instead? Asking this as I don't know if the IRA involvement affects this.

Thanks in advance all