if the brother lived in the house for a year and just covered the mortgage (and maybe insurance and taxes) it doesn't sound like there's any kind of profit motivation. You should check on the points that Rick made.... I assume depreciation was established last year and the sch e resulted in a loss. Personally, I'd amend the 2017 and take the sale of primary exclusion in 2018. I don't think it looks suspicious. It does have to be realistic.