Rental Property Sale + 6 Figure Capital Gain = Huge Tax Liability

[Peter Mikhjian]

I've got a good/bad tax problem and I'm looking for some advice:

My wife and I bought a rental property in 2015 for $275k (no LLC, purchased directly in our name, so technically a partnership). We put about $25k into it to get it reparied and up to speed. It was a great property for us and it was CF positive from day one (even with the repairs). However, we just sold it about 2 months ago when another investor offered us $430k for it!

So, the good news is that after all of our expenses, we have ~$125k gain, the bad news is that we have a ~$125k gain.  

I've been working with a CPA for some time, but their recommendation was to just pay the tax on the gain, donate, or sell some stocks at a loss. I thought they'd recommend something like - create an LLC and reinvest it into another property and you can offset that gain with the amount you pay down, or go buy a car and write that off, or something of that sort.

Do you have a recommendation on how we can reduce our tax liability for this scenario?

Thanks for any advice

Pete