To rent or to sell

[Joseph Henry]

Primary home is valued at $850k (purchased at $450k), with less than $20k remaining in the mortgage. It will be paid off in the next 10 months. I could rent it for $3800 and net $2800 after expenses (after the mortgage is paid off). Home is 25 years old and requires a new furnace, A/C, and roof in the next 5 years. 

Interested in a new primary home valued at $1.6M. I plan to make 25% down on this home. The mortgage will be 1.2M if I decide to rent or I could sell the older home and bring the mortgage down on the new home.

Consider the situation, interest rates and the market, what makes more sense? Rent or sell or the home? If I sell the home, I could net $400k and pay no tax. I am not sure how the depreciation and tax write off work for the rental, and if that makes a difference.