The QI said that if things change in the future say during a refi (not on this sale) we could take her off the loan and it wouldn't cause a taxable occurrence.

Not trying to scare you, all angles need to be considered.If it's a traditional IRA, you're going to have to start taking RMDs eventually...also your rental real estate depreciation probably gets that net taxable income close to zero? 

So, using your numbers, if they had $100K in forgiven debt, they would have $100K of taxable income.

Wayne Brooks,Unrecaptured depreciation is taxable (in full) at the time of sale.

I'm looking for ways to reduce my taxable and am looking into whether 1) I qualify for a solo 401k as a landlord and 2) whether it will help me reduce my taxable income.

You might prefer less of a return on the front end and more on the back end when maybe in future years the taxable income percentages become lower.Look at the exit time horizon usually 2 to 5 years but sometimes 7 years of projects to see if it fits with how long you want the money in a project.

That cash is not taxable and available for you but you also completely deferred all tax on the sale of your old property.

I have some properties that I own free and clear that produce a net taxable income, and more properties that are financed so the mortgage interest deduction reduces my taxable cash flow.  

I also can write off some of my homes square footage as a home office and if the photography business loses money (which it will on purpose for the first couple of years) I can write the loss off of my W-2 taxable income.I am not saying that you need to go get a W-2 job but you should re-evaluate your business and what it is really making or paying for. 

I invested from SDIRA and also taxable account.