Selling My Rental with a 1031 Exchange

[Damian Young]

This is a 2-parter. 

1. I want to do a 1031 exchange when I sell my Jenks rental property, so I can reinvest the capital gains in another property without being taxed. My question is can I use $5k of the capital gains towards my current live-in home without being taxed, or is it not considered a like-kind investment since I already own it? 

2. Also, I'd then like to refinance my live-in house to my wife's name only. The reason I would like to transfer it to her is she get's the VA loan opened up after we sell the rental property. We can save the $100/month in PMI on our live-in property, and it reopens me back up for a more credible income-to-debt ratio and FHA loans. Is this a good idea or would you suggest something else?