Tax Implications for Seller; duplex sale subject to current loan

[Eric Turner]

I have a client selling a duplex.  He bought the property for about $100K 15 yrs ago and refinanced the deal, pulling cash out about 10 years ago for $325K.  So his basis is very low.

We have an offer on the property for asking price (above current loan balance) with 30% down, seller finance 70% that will allow seller to get out of the deal.  Seller will consider refinancing the property and financing subject to new loan with a balloon in 5-7 years.

What will the tax implications of that sale be vs. bringing additional cash in and exchanging into another property?  I have other "traditional" offers coming in lower than current loan balance.