the loan itself does not add to basis.
if you bought property for$100,000 and got an $80,000 loan your tax basis is $100,000
if you refi for $120,000 your tax basis is still $100,000
if you use the cash out for improvements that cost of the improvements adds to basis and needs to be depreciated,
if you spent the cash out for repairs and maintenance those are deductible expenses but do not add to basis.
if you used the cash out for personal purposes the basis isn't affected.
