tagteam said that when your father passed "the property's basis was stepped up to its fair market value on the date of your father's death." That's not necessarily true.
You didn't say who owned the home before your father passed, or what state you all live in. If your father was the sole owner, and your mother inherited the entire property, then yes, her basis was stepped up to the fair market value on the date of your father's death. But if your father and mother owned the home jointly, and you are not in a community property state, only the half interest that your mother inherited from your father gets stepped-up basis. The half that your mother already owned before your father passed does not get stepped-up basis. However, if they owned it jointly in a community property state, your mother got the stepped-up basis on the entire property when your father passed.
As tagteam said, you and the other owners absolutely need to consult a tax professional for help handling the taxes, including determining each owner's basis. I wouldn't rely on a real estate lawyer for tax advice, but you need the lawyer to determine each person's percentage of ownership. You should do that before the sale, so the 1099-S forms and the distribution of the proceeds reflect the proper percentages. So you probably need both a tax professional and a lawyer.
@Hello786 wrote:
We want to make it as simple as we can come tax time.
There is no way to make this simple.
