neither. the loans have nothing to do with basis. They are not an expense. (That is why they are not income when you get a loan. Your wealth has not increased. You get money but you have an offsetting debt, so your net worth does not change.)
Your capital gain = net proceeds - adjusted basis
adjusted basis = original cost + cost of improvements
original cost is the price you paid for the property including most closing costs.
So if you buy a rental property for $100k with $3000 of purchase expenses (commissions, transfer taxes, home inspection, etc.), putting down $23k and borrowing $80k, your cost is $103k (+ expenses to buy). For capital gains it doesn't matter if when you sell there is a $70k mortgage balance or a $0 balance. The mortgage loan is irrelevant to basis. How much cash you take away when you sell is also irrelevant to your gain.
You will find your purchase cost in your closing documents from the sale. Most expenses in those docs will be costs. e.g. transfer taxes, commissions, home inspections, lawyers fees, etc. The only things that would not be would be things you could deduct at the time (real estate taxes paid to the seller, mortgage interest, etc.)
For personal-use property converted to a rental things are more complicated. If the property has gone down in value your basis for depreciation is the lesser of your adjusted basis at time of conversion or the fair-market value and depends upon the value of the land (which can't be depreciated). For some details see these articles. This is complicated enough that if you did not consult a CPA, enrolled agent, or tax attorney at the time of conversion to rental property to get the depreciation correct, you should do so now to make sure the sale is reported property.
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