Anything above that and including that though, is taxable.

The refi does not create a taxable event.  

It is tough to leave a W-2 and qualify for about two to three years, based on your taxable income from qualified money sources.  

@Dustin Keiswetter The $40K that you pull out would first be applied toward your taxable gain (if you qualified for the 1031 Exchange), so the 1031 Exchange in the facts provided above would not provide any benefit. 

If I factor the depreciation offset on my taxable income, I would actually exceed what I brought home from my W2 job .I get to work my own schedule, invest in my kids development, become a gourmet chef at home.Wohooo!

If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you."

Therefore, this child support is taxable income and is considered a common CIVIL debt dischargeable in bankruptcy.

The home is priced well under the appraisal that was done when we purchased it (before improvements), and even priced under the taxable value.  

I disputed all of them and most I got a reduction in the taxable amount.

Is Cancellation of Debt income always taxable?