My parents bought a house in 1990 for $40K. They never lived in the home and used it solely for rental purposes. The house was always rented out. My oldest sister was put on the deed in case anything happened to my parents. I was a minor, so I was never on the deed. My mom passed away in 2016 and my dad passed away in 2018. Before passing, my father said my sister and I both would inherit the house once he passed away. Once my father passed away, my oldest sister became full owner of the house. Since I was never on the deed, my sister is the one that managed the property. The property was always rented out from 1990 up until Nov 2021. Right before selling the house, my sister added me to the deed so that we could split the money from the sale. I was added to the deed 3 months before the sale of the home. My parents bought the house for $39K and we sold the house in 2022 for $420K. I got form 1099-S with gross proceeds of $210K. The amount was split evenly between the both of us. The FMV back in 2018 was around $200K. Our parents did some improvements throughout the years totaling around $10K. I am so confused on how I would report this on my tax returns. I have done some research but still confused. Would this home be considered long-term even though it was a rental? How do I go about reporting this income? Would I use the date my father passed away as the date that I inherited the property or the date when my sister added me to the deed? On what schedule do I report this income?
