Capital gains tax on a quit claim deed rental house

[Sara Roberge]

My Father and brother owned a rental house together.  Several years ago, they wanted to sell and my husband and I were in the process of acquiring some rental properties.  So, they did a quit claim deed into our names.  We settled on a price with them for about $134,000, so that is the amount of our loan.  They paid $66,500 when they purchased the house a few years prior.  $66,500 is the amount on the tax record.    My question is:  When we sell the house, are we paying capital gains tax on anything we get over $66,500 or over our loan of $134,000?