@mgawro01
Given all the facts, your father probably had an implied life estate. You will want to get that documented as best as possible in case of audit. (You don't need to submit proof with your tax return, but do your best to document the circumstances and keep the information with your other important tax papers for at least 3 years.)
Assuming a life estate, you inherited the property at full market value. Selling for $50,000 under market value has several implications you need to review with a specialist. For one thing, there is no absolute requirement that you sell property at market value, and if you sold at less than market value, you may have a capital loss that you can report on schedule D and use to offset any other capital gains you might have. (You can treat the home as an investment and deduct a loss as long as you never used it as your personal residence.)
However, selling to a "related person" may disallow the claiming of a capital loss. (And that depends on whether a nephew is considered a "related person" for this type of transaction, which I am not sure about.) Also, if the nephew is considered a related person, it is possible that not only are you disallowed from claiming a capital loss, but you might have to report $50,000 as a gift of equity to your nephew on form 709.
(It would be a deductible capital loss and not a gift of equity if you sold it to a stranger. The question is whether a nephew is a close enough relative to be a "related party" under tax regulations. I don't know off the top of my head.)
And lastly of course is the issue of whether or not the money paid to the other relatives is considered a gift for purposes of form 709. I suspect that if the house did not go through probate, then it is legally yours alone, and even though you might be following your father's wishes in sharing the proceeds, that will legally be considered a gift reportable for tax purposes. I'm not sure you can avoid that. However, there is a $13 million gift and estate exclusion, so gift tax will probably not be owed even if the gifts are reportable. (And if you expect your gifts or estate to be more than that, you should definitely be hiring your own expert who will back up their opinions by standing with you in case of audit.)
Finally, off the topic of taxes, I wonder if you have considered the implications of the below market sale to the nephew. Supposing you had 4 siblings so the proceeds are to be divided 5 ways. By selling for $50,000 less than market value, your siblings are each getting $10,000 less than they would have gotten if you had sold it to a stranger at market price. Do they know this and are they ok with that? Lesser amounts have torn families apart.
