rjs
Level 15
Level 15

Get your taxes done using TurboTax

Paying off the loan has nothing to do with how much profit you have to pay tax on. You pay tax on the "whole profit," whether or not you use part of it to pay off the loan. Paying off the loan does not reduce the amount of profit that you have to pay tax on. Your taxable profit is the total profit on the sale, not the amount of cash that you receive at settlement.