Box 7 is meant to be filled in for someone engaged in the business of catching fish. But okay let's deal with your situation. In your hands, the painting is a capital asset. It's value is what the painting was worth at your Dad's date of death. Unless it's been a few years, I'm guessing that it's value is about the same as the selling price. I would list it on the Long Term Sch. D and show it as a wash, that is basis as equal to proceeds of sale. You'll need to show the sale on a Form 8949 part II check box f and then transfer that to the Schedule D.
To report the sale initially, I would take the amount on the line 7 of the 1099-MISC and put it on a schedule C as sales. I would then put in an amount in cost of goods sold equal to the sale. Then put a note at the bottom of the Schedule C and say see Schedule D.
