I have a followup question - I will realize a lot of capital gain from this home in Idaho, so I think unless I purchase a new primary residence I will have to pay that capital gains tax. 

It would/could be only 15% capital gains tax and yes you could/would deduct all selling costs including commissions and transfer taxes.

(gross rents $4900; 8% PM; mortgage+insur+taxes = $3600/mo).

@Andrew Slezak Opportunity Zone (OZ) investing allows you to defer capital gains taxes (e.g., from crypto) by reinvesting the gains into a Qualified Opportunity Fund (QOF) within 180 days.

And must be pretty significant unreported income if it would have caused $45k in state tax liability.You advised your client to wait past the expiration of state statute.

You could look into forming a C Corp as an alternative way to own this property that could affect your tax returns differently, I am not a CPA or giving tax advise.

I'm assuming you are arriving at your cash flow number by applying Gross income - cap ex, maintenance, utilities, vacancy, tax, insurance, mgt, landscape/snow & Debt service?

High taxes.

This will also allow you to avoid taxes on the sale.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).