Thanks  I am not a CPA or tax expert.  

The only inconvenience is I have to pay booking.com a commission at the end of the month, and I have to remit the local taxes myself vs.

@Ross DerouenBigger Pockets is a great place to find an accountant specializing in real estate taxation.A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.I recommend finding an accountant specializing in real estate taxation, business taxation, financial planning and tax planning.Consider working with your accountant remotely to expand your options.I would also recommend looking for an accountant willing to work with you throughout the year.

Tax free appreciation and rents significantly trump the loss of depreciation and custodial fees.

The 1031 exchange rule to defer your tax is two part 1) reinvest all your proceeds and 2) purchase a property (or properties / DSTs/TICs) with an equal or greater market value.  

Please feel free to utilize me as a resource if you want to run through a deal or discuss any of the national or local wholesalers out there. 

@James Thompson Transferring property from your in-laws to you can be done through a gift, sale, or trust transfer, each with different tax implications.

If you live in the home for 2 out of the past 5 years and move out of state you may be exempt from the tax.  

Feel free to reach out if you have questions or want to brainstorm ideas!

But ya have to make some educated prognostications in life.Add this to the information your processing - What your talking about doing is eliminating around $4000 or interest expense (which is deductible anyway so really could be a real impact of eliminating $2800 or so) of debt in exchange for paying over $10K in capital gains tax (don't forget possible state gains tax as well).