Trying to structure the purchase of a property at favorable terms for the seller in order to negotiate a lower price.

Property: 2 unit for $300,000 (property is worth $350k)

Seller Initially Bought it for $100,000 years ago

Adjusted Cost Basis $50,000

Sellers Existing Mortgage: $100,000

Seller has little to no yearly taxable income (5-10k) so installment sale would be ideal to keep them at 0% capital gains rate (under 40k/year).

Summary of Questions:

Is a wraparound mortgage the best structure to eliminate the sellers tax burden while keeping the existing mortgage?

Would the sellers conventional or FHA mortgage work with a wraparound?

Could a rent to own contract be used in conjunction with an installment sale to keep the sellers taxable income under 40k a year?

Is depreciation recapture relevant? If so when would the seller need to recognize that gain and how much would that be?

Are there any other items I need to consider when structuring this deal?

I'm a bit unfamiliar with installment sales but ideally the seller wants to keep the mortgage and do seller financing to us over 15 years.  So in a perfect world seller would keep their existing mortgage (which I believe if owner occupied conventional) and a portion of our payments would go towards paying off that mortgage.

Wraparound mortgage seems like the best bet and I would like to try and mitigate the risk of seller defaulting on their mortgage by paying through a third party if possible.  

I also considered a rent to own agreement that turns into a an installment sale once enough has been paid to the seller to pay off the mortgage.

The seller wants to walk away with $200,000 meaning the deal would need to be structured to avoid all or almost all taxes.  Depreciation recapture is a concern but the property has been depreciated straight line and from my very limited research straight line depreciation may avoid depreciation recapture.