Do you pay tax on sale of rental property?

I own free and clear an older home (my Dad gifted it to me after my divorce 12 years ago. I have been renting it and the detached garage apt. for about 12 years. I live 6 hours away from it so I can't take care of it like I need to. I would like to sell it so I don' t have to stress myself out about it. I can only get maybe 80,000 for it. Can you tell me how I can keep from paying so much in sales taxes on it?

You are completely confused and exemplifying that you need specific, individual help with this, to both mitigate tax and avoid what could be substantial liabilities (tax, penalties, interest, etc). However, it is a basic and fundamental tax matter that does not require highly expert help.

You ask about sales tax. There is no sales tax on the seller of real estate in any State I know of. Sales tax anywhere is imposed on the buyer (not the seller), and I am unaware of it being applied to real estate (especially residential). There may be some minor transfer type fee's or taxes similar to a sales tax, but those are normally not much of a consideration.

Income tax - specifically long term capital gains, will be a matter to determine. The gains tax this year is modest (capped at 15%). So the year of the transfer may make a difference. The tax is ONLY on the gain in the sale. That means your basis - the value of the house when given to you (which may have had some tax consequences then), and the costs of owning and maintaining/improving the property as well as things like depreciation that was available to you as a tax beneffit every year you owned it, to determine what your "basis" is needs to be calculated. The difference to the amount you sell it for then becoming the Gain (OR Loss) and tax or tax benefit on that. In todays real estate Word, selling investment real estate frequently produces a tax benefit.

I suspect you have been in the Real Estate business, (owning and running rental property - JUST LIKE Donald Trump) without reporting it as such and have lost many possible great benefits for years.

One of the those common things people in the field see is that those who try and outsmart the tax rules, and really have not a blessed clue, tend to screw themselves much more than they make any benefits.