> Should I be taxed on that gain immediately? Should I be forced to sell part of my property to cover it?

In much of the US, you made a loss, since your property taxes will go up the next year.

> I'd love to live in a world where the local tax assessor is obligated to purchase your property on demand for 80% of what they say it is worth -- surely they would jump at the chance to realize an instant profit, right?

Absolutely.