There is a decent thread in this Community for the scenario where a rental property is gifted (see link below). However, the relatively low gross sales price of $18,000 notwithstanding, you should most likely seek professional tax guidance for this matter.
Regardless, you will need to do some research and locate a few figures. One would be your mother-in-law's mother's basis in the property (i.e., most likely what she paid for the property). Another figure would be the accumulated depreciation deductions taken by your mother-in-law's mother during her period of ownership of the rental. Still another would be the fair market value on the date of the transfer from your mother-in-law's mother to your mother-in-law.
https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/tax-on-giving-rental-...
