Originally Posted by KiwiKate
If you reinvest your gains in another property you don't pay capital gains tax. And you have a one time exemption from capital gains -- it was $250,000 the last time I checked.
It must be some time since you checked because the law you quoted above was superceded in 1997 or so.
(I don't feel like checking on the exact date.) You can now use the $250k exemption ($500k for couples) as often as you like, but no more than once every 2 years.