You do not owe inheritance tax, You report the sale on your income tax return. It's complicated. The income potentially consists of three pieces: 1. sale of your personal residence (excludable capital gain) 2. Sale of investment property (capital gain) and 3. Depreciation recapture (taxed at ordinary income tax rates up to 25%).
It also depends on how you were treating your ownership percentage on previous tax returns. Was you ownership % limited to the unit you lived in or not. Did you pay rent? Did the partnership file partnership tax returns. You may not be eligible for the home sale exclusion.
Fix up expenses can be deducted as expenses of sale. Capital improvements ("upgrades") should be added to your cost basis.
Fair market value is determined with research. Sources: local realtors, property tax records, internet (e.g. Zillow).
As Critter#2 says, don't try to do this by yourself.
