"cost more than the profit made"

Not "Profit." Equity. Otherwise, if the total equity isn't invested in the new property, that difference is considered to be the taxable portion. Example, using Lisa's example:

You buy for $200k and sell for $500k. You decide not to buy again for $500k, but to keep $100k and buy using the $400k remainder. You just took capital gains of $100k. Even though you "made a profit" of $300k and bought something higher than this amount, the IRS considered the taking (up to your basis) as you taking the taxable amount as First Out.