Amend before doing this year. You essentially had a partnership with your parents and sister. There are regulations regarding special allocations and substantial economic impact. These laws are complicated and I would bet you did not have an operating agreement. You should all amend all returns from 2017 forward in order to file 2021 correctly. Any amounts due will be owed with interest while any refunds from 2017 will be disallowed. In order to get a 2018 refund, the amended needs to be filed before April 15, 2022 or it will also be disallowed. You all need to have sch E with rental income and expenses divided as your ownership percentages. Then, you and your sister will note the sale of the rental. Your parents will have a disposal of the rental the year they gifted it. Since over the allowed gift limits, your parents will also have a gift return to do.
Please:
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
