When your parents put your brother's name on the deed that in effect made a gift to him of 1/3 of the house. his basis in this portion would be 1/3 of their basis. When your mother passed I'm assuming (this could be totally incorrect because you provided no information about this event) he inherited 1/2 of his mother's interest with your father inheriting the other 1/2. for this portion of his interest, 1/6 of the total, he would get a tax basis of 1/6 of the total fair market value of the property on that date. When your father passed he inherited the remaining 1/2 (based on the previous assumption of what happened when your mother passed). his tax basis in this portion is would be 1/2 of the total fair market value on that date. so hos total basis would be the sum of:
a) 1/3 your parents' basis +
b) 1/6 of fair market value when mother passed +
c) 1/2 of the fair market value when father passed
he made you a gift of 1/2 of his interest (should have filed a gift tax return). so you get 1/2 of his basis as your basis and his holding period is your holding period. to make reporting the sale easier I would use inherited as the date acquired. this will make any gain long-term, Another item you provided no info about was whether or mot this was your principal residence. generally, a taxpayer can take a home sale exclusion if they OWN and OCCUPY the property as their principal residence for any 2 years in 5 years before the sale. it's easy for you to determine whether you meet the occupancy test. The harder part is your period of ownership. I would say technically you did not own the property under your brother gifted it to you so you would not qualify for the home sale exclusion if this was your principal residence.
