The taxable portion (if you do not 1031 Exchange) is first applied toward the depreciation recapture at 25% and then once you have recognized all of your depreciation recapture you would be taxed on the capital gain of 15% to 20%. 

She has already proven that she doesn't care about paying you. 

Mortgage rates are still below a year ago and remain at historical lows, which has proven a boon for the housing market, economists note.

You need to learn how others have structured and copy their proven systems.Let me slap you with a little reality check.

However then you have an LLC that is still going to recognize gain when it sells property to the first LLC.2.

Obviously nobody has a crystal ball, and even the best predictions are subject to black swan events (as this past year has proven). 

It was instantly recognized as an opportunity.

I have always viewed old homes as proven.  

Typically when you are investing in these markets you won't see much in appreciation, but the stability of these markets has been proven to cash flow well and hold their value when everything else seems incredibly volatile. 

You are on the right track to recognize the debt is a major factor, specifically CC debt.