Some people hold title the wrong way

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Hello BP.  Thought this one was a tough one that only a CPA could figure out and a good learning lesson on how to take title. What will he/mom be taxed if they sell? Can taxes be avoided? Had someone come into my open house and say they want to sell their house they have lived in for years that they purchased from their mother.  They want to move into a different primary that's not as much house.  Sounded easy enough until I found out how they took title!, and advised that they should probably never sell and rather rent it as it cash flows 550 a month. His mother and father purchased the home for 142k in the 80's or early 90's.  His parents were using it as a rental the gentlemen gets married and purchased the home assuming the note of 250k at the time. His mother and father gifted the property to him and his wife but stay on title all as individuals and joint tenants.  Years later wife and him split and she does quitclaim the property to him. He continues to live and raise his kids there all while Mom and Dad have the property as an investment still and not claiming any income or write offs. No homestead filed. Years later his father dies.  After father dies mom realizes she needs a trust and places her portion of the property into the trust as tenants in common.  Should Mom claim the property as a rental and write it off?  should he claim a homestead? should he rent it out and write it off? should he sell?  How should they hold title?  What taxes have they dug themselves into? If they wanted to sell is a 1031 possible? Thank you for your help CPA's and Attorney's