Also if you received a 1099-s for the sale you should report it, but when you answer the TT questions if you are eligible for the lived-in and owned for 24 months out of the last 5 years, you won't be taxed on up to $250k of gain (not proceeds) per owner.
Even if you don't meet that test, read the rules carefully. There are exceptions and extensions.
See https://www.irs.gov/taxtopics/tc701, which says in part:
Qualifying for the Exclusion
In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.
Reporting the Sale
If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable.
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