This website may help you figure it out http://www.engineeringtoolbox.com/na...ing-d_826.html. You'd probably want to keep the line 1" all the way to the tankless, but if the furnace and the tankless were both on at the same time, it will happen, you have to take all of those things into consideration. I didn't run your situation, you may need to upgrade your entire gas service. Starving the appliance for fuel would be a big hit to performance.
Also, VA probably doesn't have super cold incoming winter water temps, but it might, depending on how the piping is run, and the weather. A deep well could be super cold all year long, rather than a municipal supply in the middle of winter. The tankless units produce lower temp hot water as you reach the max flow. Most can raise the incoming water temp around 50-70 degrees at max flow. You need to read the spec sheet VERY carefully to determine if you're going to get decent flow to fill a big tub in a timely manner. With a tank, it has potentially hours to recover...with a tankless, it's doing it upon demand, and the only way to get more hot water is to use a bigger flame or slow it down to maintain the desired temperature rise.
So, the decision is yours. You probably haven't done anything to the WH in those 12-years...you will not get away with that on a tankless which may require at least annual descaling (depends on your water chemistry and use). Think teapot...eventually, you have to clean out the deposits. Maybe a quart or two a day. Now, amplify that by a factor of 100's (but, the water doesn't get as hot, so you don't get as much per gallon heated). You see what I mean...those deposits limit heat transfer and flow, they need to be removed on a regular basis. If you're really lucky, you can go awhile, but you will need to do it eventually.