Tax and mortgage interest question

[Kin Leung]

Hi BP, We currently have 3 properties in the Bay Area, 1 of which is our primary residence. The other 2 are rental properties with enough positive cash flow that we have to pay taxes on the rental income after all the deductions and depreciation. Our primary residence has a loan balance of about $500k and the rental properties have appreciated enough that I'm quite sure have more than $500k equity despite still carrying mortgages on them. My question is if I take $500k out of the 2 rental properties and put the money towards my primary residence, it would probably generate a passive income loss and as a result offset the rental income tax I have to pay. Does that logic make sense? Are there implications I need to be aware of? More specially, if I put the $500k towards the primary residence, would it nullify the investment nature of the use of the money?? Thanks for everyone's input.