I'm not sure you have any capital gains there.  It sounds like a business that goes on Schedule C, even with rental income that suggests significant services were being provided to the tenant while the property was being fixed up.  Or, it sounds like a partnership and you're late filing a Form 1065.  Whose name was on the deed?  Probably not the "silent investor."  It's irrelevant where the proceeds were deposited.  You could tell the escrow company to wire some money to pay off the credit card used to buy new appliances, but that doesn't mean American Express pays tax on the sale.