Let me try restating this for you:

"The selling price was over 400000.00. It would like she had a large gain but the mortgage balance was paid off."

Read it like this:

"The selling price was over $400,000 but I now see the amounts she took already, over all those years, was just using the home to prove she could secure the borrowing she did. That is why she had to pay it back from the Sale proceeds and didn't get all the sale money, and I see that isn't part of Profit or Cost or even Sale. It's part of Banking."

And are you using ProSeries to prepare the tax return?