My Money Hurts

Financial Newbiefilter: Should I sell this mutual fund I bought when I didn't know what I was doing? I've recently gotten my finances into a semblance of order. The one festering boil left on my finances is a managed mutual fund I bought five years ago (as of May) when I had a certificate of deposit come due and got strong-armed by a fund salesman masquerading as a financial planner at my banks. I'd like to get the money out of this dog of a fund and into an index fund of some kind, but the tax implications are making my head hurt. I've had the fund for five years. In that case a sale would be taxed as a long-term capital gain, correct? Is there any way to further reduce my tax liability if I'm immediately reinvesting the proceeds from the sale in a different fund? If it matters, I have maxed out my 401(k) and a Roth IRA. Another complication is that I may be buying a house in a year or so. If I plan to use this money as part of a down payment, am I better off sitting on it than putting it into another fund which I might have to pay short-term capital gains on when I sell? My brain hurts. Please halp, hivemind.