Tax question - Home sale exclusion

Forgive my awful grasp of tax vocabulary--My grandmother, who was 1 of 3 owners, sold her house last summer. She got a 1099-s for her portion, which was less than the $250K limit. She shouldn't have to pay taxes on it, b/c it was her primary residence for at least 2 out the last 5 yrs. What kind of proof do we need to show that and who do I send it to? Do we just take care of it on another part of the return? I will call her accountant next week, but I figured let me try here for a quickie answer so I can relax about it. This kind of stuff always turns my stomach in knots, b/c I don't understand it. Thank you.

Re: Tax question - Home sale exclusion

The 250k limit is actually on the net profit from the sale, not on the proceeds from the sale. But seeing as how the 1099 was for less than 250k, it doesn't seem that she could have more than a 250k profit. There's no forms you need to 'send in.' Just give the 1099 to her tax preparer and she will also have to provide him/her with an amount as her basis, or what her cost was, before the house was sold.