I suggest both you and your father see a competent CPA as soon as possible, especially if this was a 2004 transaction. The other specialists' answer will not work because it does not address the issues you created by the transfer of property
back and forth between you and your father.
When your father transferred the property to you he completed a gift potentially causing gift tax
. By the same token, when you gave him cash you also completed a gift which may also be subject to gift tax. Over the course of the calendar year, if the value of all the property (cash, stocks,real property, etc.) you transfer to an individual
other then your spouse exceeds $11,000, then you may be subject to pay gift tax and be required to file a gift tax return
. If you have a spouse you may give up to $22,000 without gift tax consequences. In this scenario both of you may need to file gift tax returns (Form
709) and you end up reporting
the entire sale on your income
A potential solution is for you to take the position that you were acting as an "agent" on behalf of your father's interest
(which may have been the case) and you in effect received his proceeds for him. To substantiate this you will need to issue a nominee 1099 giving to him his share of the 1099 you received for the sale of the property.
I really recommend you see a tax attorney or CPA immediately to get all your ducks in a row. They should be able to hear the full story and recommend the best course of action in your situation.