Can any CPA confirm this?

Two examples

Case A: bought property at $400K, 5 years later, sell property at $400K, 5-year depreciation total 50K.

With depreciation recapture the capital gain is $50K.

Case B: bought property at $400K, 3 years later, market rose and cashed out $70K. 5 years later, market drops back and sell property at $400K, 5-year depreciation total 50K.  

My old understanding is, after cashout refinance the cost basis should be adjusted lower by $70K, therefore with depreciation recapture the capital gain is $120K.

However I was just told by an "expert" that in case B, cost basis does not change after cashout refiance and the capital gain is still $50K!

Is this ture? That $70K is a pure tax-free money?

If this is true, no wonder people like to do cashout refinance over and over to lock in the gain tax free!