Taxes onCapital Gain from second home if used to pay off HELOC

[Chiarella Esposito]

Next year we mean to sell a house we purchased for our kids to use while they were in college.  We can probably get around 40,000 in capital gain.  Will we have to pay taxes on that gain if we use it to pay off a second mortgage, that is a Home Equity Loan (based on our own home) amounting to about 30,000, and perhaps part of a car loan as well?  We have no credit card debt.