On the federal side it should be fairly simple I would think. Since the 1099-S only has your 50% of the proceeds. that actually simplifies things a bit. You report the sale in the Investments section using 50% of the FMV on the original owner's date of passing as your cost basis. Since it's inherited property make sure you specify that so any gain realized is taxed as a long term gain, and not as a short term gain.
