I presently have a balance of $227,000 for a home equity loan. I am paying only the monthly interest - approx $800.00. I am planning a sale for $220,000, paying the balance out of pocket to pay off my loan. Does capital gains come into play here if I won't make any profit?
Thank you, kathy

Kathy,

The loan has NOTHING to do with the capital gains calculation.

Capital gains is determined by the proceeds of the sale MINUS the basis (what you paid for the property plus costs of the sale plus closing costs from when you BOUGHT the property and when you SOLD the property).

You report any gain on Schedule D.

You MAY be able to deduct the loss if the property is a business property. If it is PERSONAL property, the loss is normally NOT deductible, but it STILL must be reported.