Be aware, both of the above answers assume that your father retained a life estate on the property. With a life estate, even though you are considered a co-owner, you can’t sell or dispose of the property without the permission of the life estate holder as long as they are alive. That means that in the eyes of the IRS, you inherited the property when the previous owner died, even though you were technically a co-owner before that time.
However, if the deed says that you were given part of the home “in fee simple “then you were an equal owner of a share of the home and you had the legal right to sell your share of the home to someone else even if your father didn’t give permission. In that case, you did not inherit the house when he died, and your capital gains situation becomes much more complicated.
Now, there is at least one expert on this forum who will point out that you may have an implied life estate based on the circumstances even if it wasn’t written down that way on the deed, and an implied life estate would mean that you inherited the entire house on the date of your father‘s death. But it is maybe something that you will want to run past an attorney or tax expert in your area and have them review the language of the deed where your father transferred part ownership to you. Most people are not audited, but if you are, the IRS may want to see the deed and you will have to support your argument that you inherited the house rather than being given an equal share 4 years previous.
