The answers are not simple by any stretch, as you've left out quite a lot of information. Because of this, even with the information included you'll still need to deal with a tax pro on this. Without knowing how the taxes were dealt with since you two purchased the property, its just not possible to provide anything close to a definitive response.
1.) If the check is written to my aunt on the sale of the property, can she claim the entire amount on her taxes and be taxed in the 0% bracket as she's retired and her taxable income is under 38,000 for 2021 tax year?
Who the check is written to doesn't matter. When you sell your share of the property, what you do with the proceeds doesn't matter. Either your percentage of the gain is taxable, or it is not.
2.) If so, is she then able to gift me the amount tax free (but would have to fill out a gift form as the amount is over 15K)?
You can't be gifted that which you already own. (Or what you owned prior to the sale)
3.) My plan is to invest most of the money into dividend stocks and just let it sit. Is an IRA also an option to avoid Capital Gains tax?
What you do with the proceeds doesn't matter. That law deferring taxes on the gain was dropped/phased out/eliminated back in 1997. If your gain is taxable, you pay taxes on it. Period.
4.)Also the Rental Property (Duplex that is two separate addresses) was my primary address for 2 out of the last 5 years.
Looks like you're going around your elbow to get to your thumb. Or at least, that's my initial impression here. Assuming the tax reporting history of the property allows it, you will report the sale of your half, and your Aunt will report the sale of half. Period. End of Story.
If you qualify for the "lived in 2 of last 5" capital gains exclusion for your half counting back from the closing date of the sale, then you won't pay taxes on *YOUR* gain. But do understand that you will pay taxes on the recaptured depreciation no matter what. Depreciation recapture is not exempt from taxation.
More than likely the complexity of this will require a tax pro depending on how this property was reported on taxes by both you and your Aunt in past tax years. Depending on how things were reported in the past, the TurboTax program may not be able to handle a situation where you have a duplex with two owners and one of the owners used a unit for their primary residence.
Please seek professional assistance. The fines, penalties and back taxes from doing this your self and getting it wrong will make the cost of a tax professional seem like a pittance in comparison.
