Cash out on rentals/tax treatment

[Dee M.]

Hi Everyone,

I'm hoping someone can help me clarify this question;

I own several rentals in Denver (free and clear).  I want to pull some cash out and buy more rentals,(seems to make sense at these historically low rates).  Does anyone know how this would be treated tax wise? Would that be treated as ordinary income and taxed at my current tax rate?  Thank you for any help!  

[Dave Holland]

Dee

Yes just to expand on the other responses we are all assuming that by "cashing out" on the properties that you own you mean you will be doing some sort of cash-out refi and not actually selling the properties.

If you were selling the properties there would be tax implications but in obtaining financing secured by your properties there are none.

I think that's what you are wanting to do anyways but just wanted to clarify.

Dave