Capital Gains Sell Rental to Pay Primary Residence Mortgage

[Larry Johnston]

Capital Gains Question

In the next year or two my wife and I and planning to move to the Dominican Republic. 

We own 3 properties here in USA

Property #1 Rental owned free and clear, Valued at $250,000.00 with $125,000.00 capital gain if sold.

Property #2 Rental owned free and clear Valued at $300,000.00 with $100,000.00 capital gain if sold.

Property #3  Primary Residence Valued at $400,000.00 with a mortgage balance of $225,000.00

Essentially rent from Property #1 pays mortgage of #3

We would like to only have 2 rentals when we move...easier to manage.  We would also prefer NOT to sell the Primary Residence as we would want to move back into it in 5 to 10 years.

Can I sell Property # 1 and use the proceeds to payoff Property #3 mortgage and then convert #3 in to a rental with out paying capital gains...or at least defer those gains.  Ideally I would like to move back in to Property #3 as my Primary Residence and avoid any tax at all as we never plan to sell #3 and leave it to our daughter.  I have read you can roll proceeds from one investment in to another with out Captial Gain.  Rather sure this is not possible .

Probably a better question for a CPA....but I thought I would see if anyone here knows.  

Thanks,

Larry