I would do some research first. Call at least three businesses that do upholstering and/or slipcovering for prices. The couch looks to be in very nice shape and the style is traditional. I would eliminate the skirt if the legs are pleasing. This would ease the style into more of a transitional vs. traditional one. I don't see any stains , wear, or sagging in the cushions. Personally I'd jump at the chance to own that couch...I guess some folks just have money to toss LOL. I could never see getting rid of a well made piece of furniture that perhaps, for my taste, I had grown tired of. There doesn't appear to be a thing wrong with it, other than the fact that you're not in love with the fabric. Slipcovering or upholstering it would be my choice. Good luck and please let us know how it turns out. BTW, if you decide you don't want it and it's located in mid-New York State, I'd be happy to take it off her hands ;o)

I think it is lovely and just needs some accent from throw pillows in bright colors and maybe a mohair or plush blanket/throw tossed on. It does not seem to clash with other visible pieces and your wall paint. I think some art over the sofa would be nice, too. Reupholstery can be quite pricey and the sofa appears to be in excellent condition. Don't think of it as a hand-me-down from your sister. Pat your self on the back for having the creativity to repurpose an already lovely piece.

Actually, I like the look of this sofa and you can't beat the price. I like ukigumo's suggestions. Don't think I would pay to recover it, though I would want to know exactly what that would cost first.

Thanks everyone for your input. I think have it reupholstered would be costly...fabric/labor. So, maybe I should just save the $$$ and be grateful for the free furniture.

I know I need to 'dress it up' a bit with pillow and a blanket. What color pillows/blanket would you suggest?

Our LR is pretty much a blank slate right now. Our wood floors are English Chestnut color and the walls are BM Adagio. I also want to get a new area rug. What color do you think would be best?

Thanks!

Why get rid of the arm covers? That area gets so much wear and the upholstery looks light. You could remove them when company comes over. I like the couch.

Maybe some jewel tones. I can't see too much of the rug but it looks like it has some nice green tones which could be carried up to the couch. I can't tell what the smaller colors in the rug might be, but maybe you could pull some of them out with your accents. Even silk flowers or candles or books on the coffee table would add some punch. If you still have the arm covers they would be handy to carry along when you go shopping.