There are exemptions for first time sales, and other situations.
If this is your primary residence and you are looking to purchase another home to live in, the tax penalties will not likely apply.
D. Ben Edsall
Turn-Key Properties LLC
No one likes to give their hard earned money to the government but if you can hit a home run by selling for a huge profit in such a short time why wouldn't you? Turn around and buy a bigger and better foreclosed home well under the current market and do it all over again. There are a lot of deals to be had out there, especially if you have the cash!
I believe you are referring to a 1031 exchange-where you sell one property and use the proceeds of the sale to purchase a new property and don't pay capital gains.
As far as I know, a 1031 can only be done with investment properties. A primary residence can not be used for a 1031 unless you converted it to an investment property for at least one year and one day prior to selling it.
There may be a much better solution for you though.
I am not sure if you are aware, but a married couple may sell a house that they own as a primary residence and be tax exempt for up to $500k in gains (for a single person that number would be $250k) if they lived in that home for two of the last five years.
I realize that you mentioned that you bought the house only one year ago. I guess it may be difficult for you to wait out the year, but if you can the capital gains would be tax exempt.
This would be much simpler than a 1031 anyway, for many reasons including the fact that 1031's are very complicated and can get messed up very easily.
I hope this helps.