cross collateral and tax implications

[Chris Isaacson]

Hello,

If you have 2 properties cross collateralized with 1 lender and you sell 1 of the properties can you roll the equity to the other property with out taking a pay out of taxable profit/income?

For example: Property 1 Loan amount $300k, Property 2 Loan amount $200k 

You sell property 2 for $400k which equates to $200k "profit" that is rolled to pay down on the $300k note. Note balance on only remaining property is now $100k.