Selling a rental property after pulling out equity

[Adam Sanders]

Looking to better understand process for selling a investment property that has deferred tax through depreciation that has been refinanced recently to access equity for another investment opportunity.  When i sell i will have little or maybe none or negative equity compared to before i refinanced.  How do I continue to defer this tax?

[Mike B.]

you can refinance all you want but when you go to sell the property, your CPA (and IRS) will look at your total gain.  That is the sale price minus all the money you invested.  So if you buy a house for $100K and put in $50K of renovation.  Then you sell it a few years later for $500K... you are taxed on the GAIN (minus depreciation) which is $500K - $150K - depreciation and anything else you renovated on the property or can claim as a loss.  Speak with a CPA to see your potential tax liability