How to reduce Capital Gains?

[Tiana O.]

Does this make sense? Say someone has a house worth $250k thats complete paid off, free and clear. They want to sell it and avoid some capitol gains. So they do a cash-out Refi to put a $200k mortgage on the property (80% LTV) with no prepayment penalty. Then they sell it for $250k. So now the original $200k from the cash out was technically loan aka no taxes. But using the proceeds from the sale the $200k loan is paid back, and only $50k is actually profit.

(Not including a 1031) Is this a good strategy for reducing capital gains??

Are there other ways that you know of?