The book is referring to the passive activity loss limitations imposed by Sec 469.You'll still be able to use expenses to offset revenue, you just won't be able to use a tax loss on the rental to offset other taxable income if you're above $150k in AGI. 

I consolidated my 401Ks from previous employers and “pooled” them into a Solo 401K to avoid it being a non-taxable disbursement.

But then all gain is taxable. 

There are certainly some complexities such as exposure to taxable UDFI (unrelated debt-financed income) on the leveraged returns. 

Does it just become instantly 100% taxable like a withdrawal or is it worse?

Our condo income and expenses are all in the exempt category and nothing is taxable. 

Live in is a good strategy especially if you will live there for 2 years or longer (section 121 of the Tax code) you will not pay tax on gains up to $250K single or $500K married, keeping that in mind markets change, so consider where we are and where you think you will be 2 years from now. also consider if you are there less than 2 years the gains are taxable at a very high rate about 1/3 or more of net profit for most people.

Also, are broker's paying themselves commission if they do purchase/sell a house or are they just deducting it from the purchase price as the commission is taxable?

You can't form an S Corp and run those expenses through to offset your W-2 net taxable for the same reason I can't form an S Corp and write off the cost of my new bed sheets and huaraches. 

my questions was more if the 630 (or less if only depreciating the building), would be how large the taxable income can be, before tax needs to be paid (ie. anything above the 630 $ is taxable)?