Do you pay taxes on a cash out refinance?

[Michelle Bright]

Hi BP!! Our plan is underway and it is looking like we will be able to complete our first cash out refinance in a couple of weeks!! Since we are currently in the busy tax season it got me thinking...

Will we have to pay 2018 (next April) income taxes on the cash we will be receiving after our refinance goes through? Is there a way to prevent this if so? 

We are planing on rolling all of the money right into our next property by purchasing a 2-4 unit to owner occupy using a FHA 203k loan in Chicago, IL.

Thank you for all of your help!