How does one make profit in the sale of a real estate sale?

[Mohammad Mahir Khan]

Hello everyone,

I am just an accounting student in college right now and I was having a question that keep son popping up in my head.

So say I bought a house for 50k. I had a 10k down payment and a 40k mortgage. Say I then turn around and later sell the house for 100k so my gain is 50k. I understand that unless i use this 50k to purchase another property using a 1031 I will have to pay taxes on it. Say that I do go ahead and reinvest the money. I am left with 50k left to pay off the 40k loan. Would the profit on this literally just be the 10k that i get back because it was the down payment I put down in the first place?

I am a bit confused about this so if someone could explain it would be great!