Yes. The sale should be reported, even if it resulted in a loss.
You will add the remodeling costs to the purchase price to form the cost basis.
If the house was titled only to mom, then she is the only person to report the sale.
If the six siblings were on the title with her, everything needs to be divided by seven and the cost basis become more complicated. Unless the children were on the original deed, their cost basis is the fair market value at the time they were added to the deed, not when the home was purchased.
