Like the vast variety of people all over the world and from all walks of life, we use humor as a kind of coping mechanism, if you will. This, in turn, helps us to overcome the things we have the most trouble with. Through humor you find happiness. 
Now, to answer the question, “where is the line?” 
I don’t really know. Hah, it truly depends on a number of factors. Including the type of person, how fresh their wound is, do you personally know them (if not – your best bet is to just keep to yourself), are they going through a hard time right now and the last thing they want to hear is a joke? These are questions you can ask yourself, if you’re unsure, before cracking jokes. 
When I was a new amputee I was constantly cracking jokes. As soon as I could have a pen and paper to right whilst lying in bed with tubes sticking out of, well, everywhere, I cracked Monty Python jokes. “Tis but a flesh wound,” amiright? 
But then, once I got out of the hospital and reality dawned on me, it was a little harder to make jokes when even just looking in the mirror was hard. It takes time for everyone to overcome things in their life. 
Now, my friends and I cut up all the time. They are my partners-in-crime when pranking the innocent, *cue evil laughter.*
They are the Forest to my Lt. Dan. 
So, the line is in fact wherever said person puts it. But if they are cracking jokes left and right, laugh with them. Laugh with us, dive into our dark humor. It really is okay!