I would reinvest in a another property and use a 1031 exchange to detour taxes.   

The book on tax strategies for real estate investor by Amanda Han and Matthew Macfarland.I read these two books when I first started investing and found the information very helpful.

Cash OfferARV $180,000 - $55,000(Rehab) - $14,400 (8% fees, CC, HC) - $40,000 (profit) = $70,600 MAONovationARV 180,000 x .95 =171,000 (EST.

I looked into this as well since I'm getting terribly bent over on my w-2 taxes. 

Tax-wise, profits are taxed at your ordinary income rate, and frequent flips may subject you to self-employment tax if classified as a dealer by the IRS.

u can see these homes on my website. also if there is any way to manage it.. if you can figure out how to get paid as a WA resident you will enjoy the same no income tax status you enjoy now.. 

Another common practice for nationally sparse datasets such as tax data is aggregation.

Selling and buying something else you want keep and doing a cost seg in would help with the tax burden probably better in this situation.

Plus it makes bookkeeping and doing taxes etc. more complicated and annoying/ expensive.

You can always use a software like Turbo-Tax and follow the prompts.