Lady Bird Deed

My father passed away February 2010. He had a lady Bird deed on his home in Texas naming myself and brother as the grantees to his home which transfered the deed into our names upon his death. We sold his home each recieving $18,000.00 after paying off the mortgage. Do we have to report this on our income tax return? If so how? Is this considered inheritance,or capitol gain or do we have to report it at all??