My client wants to take out $100,000 equity out of his rental home and then sell it, thereby having no capital gain for tax purpose.

Will this action affect him negatively in any way?

He owed $110,000 and after taking out another $100,000 he now owes $210,000 but will be able to sell it for $230,000. After all expenses of sale he has no capital gain, but the $100,000 equity loan was not used for building, upgrading or anything else to do with the house expense.

My concern is will IRS impose any kind of tax on the $100,000 he took out.

Any help would be appreciated.