Deductions & credits

Ok I got one for you:

 

My father inherited a house from his mom in 1982. He is one of 4 siblings. Each received 25% ownership. This past year, they all sold the house, and split proceeds 25%. So far so good. 

 

However, during 1982-2020, my uncle had that house listed as his primary residence.

 

How should my Dad treat this sale on his taxes? Capital gain/loss? Rental? Would he receive a $250,000 waiver since it was used for personal reasons?