If I purchase another property of equal or higher value will this prevent the Capital gains?
No. Not if you sell one property and then use the proceeds to purchase a new property. To defer the gains, you would have to do a like-kind exchange which is required to be handled/done/performed by a qualified third party intermediary.
If you sell the property *AND* the property was your *PRIMARY* residence for at least 24 months of the last 60 months you owned it (counting back from the closing date of the sale) then you pay *NO* *TAXES* on your first $250,000 of gain.
So a like-kind exchange only defers the taxes, while an outright sale "can" eliminate any taxes on your gain, up to $250K. Provided of course, you meet the "lived in two of last five years" residency requirement. Note that while the rules state it must have been your primary residence for at least 24 months of the last 60 months you owned it, those same rules also state the 24 months do not have to be consecutive, so long as all of those 24 months fall within the last 60 months you owned it.
