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This will be a taxable transaction. Your parent's made a gift to you and your sister 10 years ago.

So you and your sister will take on your parent's basis in the land and then add any improvements you or your sister made after acquiring the property.

If the property is sold at gain and is used personally (not for business, investment, or rented out) it will be reported on the Schedule D. If it turns out to be a loss, the loss will not be allowed.

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