Don't focus on the form and where to enter it, you need to assess the situation and decide how to report the transaction.  You'll have a 1099S, but you should also have 2 sets of closing documents, 1 from when they bought the house and 1 from when they sold it.

What was the clients intent when they bought the house?  Was it a house they bought as a vacation home or second home and decided to sell it?  Did they rent it out at all during the time they owned it?

Was the intent to fix it up and flip it? if so, do they plan to buy another house with the proceeds from this sale and then flip it?