I bought a house 5 years ago with my wife and her father-in-law. All 3 of our names were on the title/deed since her father-in-law contributed substantially to the down payment. The mortgage was under me and my wife. My wife and I have made all payments for mortgage/taxes etc.. We also rented out a room for a couple years. This is also me and my wife's primary residency.
He has made it clear that the house is ours including any rental income. We just sold the house last year and all the net proceeds from the sale went to me and my wife. How exactly should this be reported? Can I exclude 100% of the capital gains from my income? He essentially gifted the house to us verbally but we never changed the deed.
