Because the sale occurred in 2022, you report the sale in 2022, even though your sister did not forward you the proceeds until 2023.
However, you should not owe very much tax. Your cost basis in the home is stepped up to the fair market value on the date of the previous owners death. Your capital gains only consists of any increase in market value between the date of the previous owners, death and the date of the sale. If the property was rented, you will also have to recapture the depreciation that should have been taken on the property while it was rented, (even if you failed to take depreciation).
You can also reduce the sales proceeds by various selling expenses, such as the real estate commission, and certain government, taxes, and fees.
if you inherited half the house, then you should report the sale of an asset using half the cost basis, half the sales proceeds, and half the selling expenses. Your sister will do the same.
