Huge tax shock that came back to haunt me.

[Sean N.]

So hearing everyone talking about doing cash out refi's to buy more property I did but it came back to bite me in the butt.

I bought a rental house back in 2012 and naturally values went up so after a couple years I did a cash out refi and used the gain for the down payment on another rental property.  Fast forward a couple more years and the value went up again so I did a cash out refi and used the gain again to buy another rental property.  I sold the house last July and my account says I'll owe on the gains of all 3.  The 2 cash out gains and the gain on the sell even though I used the gain on the first 2 refi's to buy rental property and didn't use it to do any repairs on the 1st rental property.  I'm not saying she's wrong but I'm guessing these are questions I should have asked before I did that but how do I know what questions to ask if I don't know what questions to ask (aka, you don't know what you don't know).

Any way or thoughts I can try to limit my the taxes that are owed?  Or maybe this is just a heads up for any future investors thinking of doing the same thing.

Thanks