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Because your original property was rental property - you definitely may use section 1031 "like-kind" exchange and defer your gain - if you will use another house as your rental (not personal) property if sale proceeds will be fully used to pay for that another house.
Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031. If, as part of the exchange, you also receive other (not like-kind) property or money, gain is recognized to the extent of the other property and money received, but a loss is not recognized.
Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.
Properties are of like-kind, if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However, livestock of different sexes are not like-kind properties. Also, personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties. Real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.
To qualify for a section 1031 exchange the original property should be exchanged for other property, rather than sold for cash and using the proceeds to buy a new. Generally, a section 1031 exchange is facilitated by third party Qualified Intermediary, who holds proceeds while a new property is purchased.
Let me know if you need any help.
Form 8824, Like-Kind Exchanges - http://www.irs.gov/pub/irs-pdf/f8824.pdf
IRS publication 544, Sales and Other Dispositions of Assets - www.irs.gov/pub/irs-pdf/p544.pdf
US code - http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00001031----000-.html