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Unfortunately, your CPA is correct.
Please see below:
Excluding the Gain
I've been doing this job for 27 years, and I remember when you would just constantly "roll over" any gain on the sale of 1 property to the purchase of another (providing the new property cost more than the one you just sold, along with some other qualifications )
However, the IRS did change the rules. Now you can sell your principle residence and make a gain up to $500,000 ($250,000 if single) and not pay tax on that money.
In fact, you may qualify to use this exclusion every 2 years as long as the home is your principle residence and you lived in it for a full 2 years.
In most cases, this has been a real advantage for homeowners
However, I see that in your case, just the opposite is true.
It would be nice if all of the tax changes helped everyone, however, we all know that that s not always the case
I /understand that you may be disappointed by the Answer you received, as it may not necessarily be favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.