We expect to get about $150k out of the property when we sell.Do we take the cap gains hit, pay off the mortgage on the second rental ($80k) to increase cash flow on that property and do something else with the remainder (pay down our mortgage, invest, etc.)orDo we 1031 exchange into something else? 

The mortgage has passed through several lenders and is now with Shell point mortgage, the homeowner wants to keep the house with some help from the mortgage company, monthly payment used to be around $1100 and now all of a sudden the lender has increased the mortgage to over $2000.

Why should the government increase my taxes to pay for care for your parents?

You will more than likely make your money back but I would not count it as a profit increasing expense like adding a bathroom would be. 

The median sales price increased 4.4 percent to $238,000.

They are not increasing taxes on some of the lower end properties.

The more adversarial your approach the higher the risk in increasing the cost.To determine the boundaries, check the legal descriptions of the properties in both of the deeds.

Increase profit and maximize tax savings

Using the capital I made from those closing invested in larger yellow letter campaigns, and incrementally increase my budget from there. 

I moved from downtown Toronto in 2012 because I saw the soaring RE prices and the cost of living increases.