Hello BP!

Im going to try to keep this simple and short.

Basically, im trying to convince my mom to sell her house...here is why.

She bought it back in 2001 it was built in 1920 and the previous owners didnt maintain it that well and over the last 17 years she has never had the funds to do that either so this house is falling apart all over the place. It has sentimental value to her because all of her children grew up there and she always wanted them to have a place to stay. Which I get but im afraid if she waits any longer the thing is going to be worth nothing in a year or 2, she is going to have this piece of property that is worth less than she owes because its going to fall apart, and she won't be able to rent it to anyone. She has refinanced 2 times and her mortgage is no where close to being paid off.

The main beam of the house is sagging all over the place so the downstairs apartment floor has hills. I just remodeled the downstairs and it was one issue after the other. I currently live their but we are looking to leave as soon as possible because its just not a place were I want to raise my son.

I refinished the floors, replaced some doors, did some trim, completely remodeled bathroom, completely remodeled the kitchen, new fixtures, new electrical in the hallway, new drywall in the hallway, and the list goes on.

(Agreement was i wouldnt pay for renovations I would live rent free until I made my money back and she would sell the house to me in 2 years which she no longer wants to do which is fine but...If she sells i can get my money back i put into it)

What still needs to be done, Foundation isnt looking good, structurally walls are cracking as if the house is sinking hard to explain without pictures, roof, siding, gutters, front porch, hot water tanks are old, basement floods, backyard fence is about to fall over and if it does its going to hit a lot of cars next door and she is going to be in a really bad position, and the upstairs needs a total gut its in terrible shape. A lot of these issues are also causing other issues inside the house.

It seems like the house is a money pit and  death trap.

She says she wants to keep it for taxes because she gets to break even every year because of it. But this year she actually owes money oddly enough. This is where I need help, her tax person said she shouldn't sell the house because if she does she will have to pay back all of the money she made from the house over the years? Im not sure how true that is that's why im hoping someone with experience can shed some light for me. 

If she sells is there a way to do a 1031 exchange into another property? My only concern is her credit isnt great so im not sure if she could even get another mortgage.

If she keeps it she needs to do some major improvements which will costly likely over $50k easy to do just to make it safe to live. Which I know she doesnt have, she could try and get a line of credit or second mortgage or heloc but she wouldn't be able to afford the payments on that either so thats why im really try to get her to sell.

Side note:  Houses in this area are going for about 200-250k some arent even in great shape. But iv seen some go no less than 180k and as much as 300k. I feel like she can still make a profit before its to late.

It's a double edged sword and im not sure how to help anymore. Any advice is welcome!