Tax Implications for BRRRR?

[Hunter Preston]

I'm curious what the differences are for tax implications for a straight flip vs. a BRRRR? My understanding is that any profits from a flip will be taxed at my personal current tax rate as income. However, if I'm refinancing and getting an 80% LTV loan, any "profits" after the cash out on the refi would be debt on the 80% LTV loan. Would there be any self income that I need to report to the IRS if the extra money is debt?

For example on a flip: $60k all-in on purchase, rehab, and financing w/ ARV of $140k, the profits would be $80k but would be taxed at my personal income level

On a BRRRR: $60k all in w/ ARV of $140k and 80% LTV loan on the refi, the cash out would be $112k and profits would be $52k. Would this $52k be tax free since it is part of the refi debt?

Thanks!