I'm planning on selling an investment property (a condo in WA state). I've owned this property since 2004. I lived in it as my primary residence from 2004 to October of 2007.
I'm planning on taking the profit from this sale and investing it into another investment property that I own.
I'm planning on refinancing the mortgage on this other investment property because with the profit from the sale, I think I can get get better terms (by getting rid of PMI and the fact that it will be a conventional loan (i.e. the loan will be for less than 80% of the appraised value)).
Is there something else I need to be thinking about here? I'm assuming that I will not have to pay capital gains tax on the profit from the sale because I'm putting it into another investment property. Is this correct?
EDIT: I do not qualify for the primary residence exclusion. I listed my move-out date as 2010, but it was really 2007.
Thanks for your help, all. I asked a follow up here