Sale of 2d house in Mississippi

[webeshopping]

My parents deeded their house to the 3 children in 2012.  After my last parent passed away in April, 2018, we sold the house for $120,000 (property valued at $160,000).  The house is located in Mississippi and none of the children live in the state (2 live in Louisiana and I live in Ohio).  How do we show the proceeds from the sale of the house on federal/state taxes.  This was not the primary residence of any of the children.

[NCperson]

for federal tax purposes, the 'cost basis' is whatever your parents paid for the home plus improvements made along the way. That compared to the net sales proceeds is the taxable income (divided by 3).  It only gets taxed at capital gains rates since you owned it for more than a year. 

The fact that it was worth $160k and it was sold for $120k is immaterial to the situation

see the link below  and especially the section under 'gifts' 

If you sell for a profit, your basis is the same as the basis of the previous owner.

https://turbotax.intuit.com/tax-tips/rental-property/cost-basis-tracking-your-tax-basis/L4i1f9qB1

[HollyP]

You will report the sale of your home, not your main residence, as discussed in the FAQ, Where do I enter the sale of a second home, an inherited home, or land?

Since you inherited your home, your basis in the home will be the number you use for "original cost." For death’s in any year except 2010, your basis is the fair market value of your home on the date of your parent's death, or on the alternate valuation date if the executor of the estate elected to value the estate's assets as of six months after the owner's death. Check with the executor of the estate, who should be able to provide you with information about the basis of your home. Please see, Tax Aspects of Home Ownership: Selling a Home, for more info.

[NCperson]

HollyP -

The home was deeded to the children in 2012 while the parents were still alive and then the parents passed away while still living in the home

Why is that "inherited" as it didn't pass through the estate.