cross collateral and tax implications

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If you have 2 properties cross collateralized with 1 lender and you sell 1 of the properties can you roll the equity to the other property with out taking a pay out of taxable profit/income?

For example: Property 1 Loan amount $300k, Property 2 Loan amount $200k 

You sell property 2 for $400k which equates to $200k "profit" that is rolled to pay down on the $300k note. Note balance on only remaining property is now $100k.

@Chris Isaacson , Bank allows you to do that for internal efficiency, but you have to report gain to IRS. 

The bank is looking at like this - you sell one property, the bank gives you the money, you make payment to remaining loan. So rather than making you the payment, they are making payments on your behalf. 

Either way, the gain on the sale is taxed.