The issue is did you receive the sale proceeds and then give them to her, or did you give her your share of the house and then she sold it for a gain.
In the first scenario, you would have to report the gain and pay tax as is necessary. Under the second scenario, you would not, because she would pick up your basis when you gifted the house to her and she would presumably be exempt from tax because of the allowed exclusion.
So, it comes down to your intentions as much as anything. It would have been better if you had transferred the house to her legally before you sold it though.
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