Rental with line of credit

[rwm221]

I have a client that wants to sell his rental and he has a line of credit against it. At closing when he pays off the line of credit can that be used against his capital gains after I add in the depreciation.

Thank You

[kathyc2]

I must be reading this incorrectly, because it seems like you are asking if you can decrease taxable capital gains by the cash used to pay off the loan.

[Uncle Sam]

That was my reading of the post also.

[spanel]

I have a client that wants to sell his rental and he has a line of credit against it. At closing when he pays off the line of credit can that be used against his capital gains after I add in the depreciation.

Thank You

Loans against an asset have no bearing on capital gains / losses and only effect cash flow.

Chris