Great question and I am sure you will receive many answers. You can put off the capital gains tax by doing a 1031 exchange. This loophole allows you to replace the sold property with another like-kind property, while deferring the tax liability. You could replace your current rental with another or one closer to home for ease of management. You must work with a knowledgeable Realtor who has good experience in 1031 exchanges.
If you want out of the landlord game you should quantify the variables. One thing to figure out is your basis in the property. Improvements you have done, some operating costs, and sales costs can be used to increase your basis in the property thus lowering your capital gains liability. You should talk with your accountant because you may owe considerably less in capital gains than you think.
Another question to consider is what you would do with the proceeds of the sale. Take a trip, put into the stock market, pay off some debt?? Best to make a plan that best suits your needs.
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Santa Fe Properties, Inc