So as long as you own the replacement you’ll never pay the tax. As

You pay tax as the rent was earned.In this scenario, if you decide on February 15 of the following year that the tenant is never going to pay - THEN (and only then) do you deduct that as Bad Debt Expense.  

I would add that if you sell you should account for closing costs, real estate agent fees, and long term capital gains tax as well, unless you opt for the 1031 exchange route.  

Just trying to beat the capital gains tax as best we can-lol.

Can I be subject to self-employment tax as a private lender?

Is the $415 property tax a supplemental?

The reason he doesn't want to sell this house is because he's discouraged by the capital gains tax as well as the effort he would have to put in to list it.

If you move forward with the sale you could look at using a 1031 exchange for a portion of the sale to defer as much tax as possible to another investment.

So you can keep the benefits of that deferred tax as long as you live and beyond.If you're not looking to reinvest then that's another story - but if you're going to go to the store anyway - why not pick up a painless free $7000 and learn something new along the way that could be a huge tool for you ongoing!!!

Should I approach finding the property tax as if it was a state with income tax?