Or, am I going to possibly create a bad situation like renter not leaving.

Not a good situation for someone wanted to exit the rat race. 

Given the upside it's no brainer situation. 

And now she wants to drop the entire thing for the next year or two or more.I've wanted to own a rental since I was a teenage, our home has had all the major repairs and upgrades, it's move-in ready at this point.The ideal situation for me is to buy a second home in the next few months, @ ~7%, get into our home before summer, interest rates drop over the next year or 2, house appreciates, we make out like bandits in equity and then if it makes sense we refinance to a lower interest rate.

It should be handled by your tax software or, better yet, by an accountant.You also have an option of paying the entire capital gain upfront, which is usually not to your advantage, however in some situations it could be.

I dont think the terms allow me to post a link but here are some basics.Has been occupied avg of 17 days per month since Sept.managed by a top tier company and has 4.8 star avg reviews.Also would be a good family home (large private lot, fenced yard, hot tub).It has the benefit of being near Austin downtown, but NOT in Austin city limits (9 miles to city center), so lower taxes and no STR rules (default to Travis County rules).I have read the forum posts for similar situations, however every market is different. 

This could also be a smart short-term rental strategy since golf courses are typically situated in well-established neighborhoods with easy access to other amenities.

We've contacted Zillow for assistance, but the issue has not been resolved yet.Has anyone encountered a similar situation or have any advice on how to proceed?

The architect is very clearly irritated with the situation.

If its landlords, your market might be in a situation I like to call in the most professional verbiage possible, "TOAST."