Jennifer this is a tough one without having a look at all the cards on the table. For instance, many people believe that a balanced portfolio is a cornerstone for investing. A mix of securities, perhaps bonds as well, some real estate, etc… So your question is one that is very narrow but the answer could depend on alot of other factors including your overall strategy. Will your tax bracket be the same in 10 or 20 years as it is now? It sounds like you already sold the property? Had you already identified the 1031 property you want to exchange into? Is the money with an accomodator? My point is that if you have already done the sale but have not stored the money with an accomodator then the decision is already made, you must take the tax gain.
The other issue at hand is what would your 1031 strategy be? Are you looking at buying a single family home? a condo? multiple properties? Would you be looking for appreciation or income?
There are way to many questions to give you a qualified answer. Without knowing all the factors involved my advice would be to listen to your CPA. Sounds like he has been doing a good job these many years especially if you are in the highest tax bracket.
