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Unfortunately - that was not correct assumption.
If you realize the gain on the selling of the cabin - that gain is added to your other taxable income REGARDLESS how proceeds are used.
The issue is that was likely a long term gain - taxed at reduced tax rate.
If you did not report that sale transaction on your tax return - the IRS might assume that the TOTAL proceed is taxable and might apply regular tax rates (not reduced long term rates)
Your taxable gain is (selling price) MINUS (adjusted basis - that is your purchase price plus improvements)Thus - we need to verify (1) if that transaction was reported on your tax return and if not (2) you would need to amend your tax return and add that transaction.
Let me know if you need any further help.