It seems like there should have been a disposition of 50% of the property reported in 2013. Capital gains and recapture should have been reported in that tax year.
In reporting for the daughter and son in law, they would use the date they acquired their 50% interest, which was 2013 when calculating their principal residence exemption. They would report 50% of the gross sale proceeds as their sale price.
As for the parents, I suppose you would report half the proceeds received in 2019 (since the daughter is reporting half), probably use half of their original cost as the ACB, use the actual acquisition date of 2003 on the Schedule 3 and calculate capital gains accordingly based on half the proceeds and half their original ACB.
I would then prepare Schedule 3’s for the parents for 2013 and T1ADJ’s reporting the 50% disposition in 2013. The proceeds would be half of the FMV in 2013, the ACB would be half of their original cost, and the gain would be calculated as if half the duplex was sold in 2013 for FMV.
I would give this paperwork to the client and highly recommend they mail out these adjustment requests to the CRA. I would then have them sign a form for your file indicating you have prepared those adjustments and instructed them to mail the T1ADJ’s.
2013 is outside of the Statute of Limitation period, however, if the CRA feels there was gross negligence, or a serious omission, the statute could be bumped to 6 years or even an indefinite period.