Translation:My older sister is outside.
I wanted to ask why "ane" isn't the topic but i guess making "I" the implied topic we can also imply the sister is mine?
That's a fine translation. Duolingo is not very good at accepting plurals. You should report that.
I feel like "Big sister is outside" should be an accepted translation right?
Okay, I'm still confused on when you use に and when you use で. Why wouldn't you use で here?
It seems for verbs which location is expected, such as います (imasu, exist) and 行きます(ikimasu, go), use に. For verbs which isn't, use で to show how the verb is done.
I wrote "Sister is outside" because it wasn't clear whether it was saying "my sister" or "your sister". This sort of phrase in Japanese is clearly context dependent. This answer should be accepted right? Or is there another word that I didn't know about that is used to refer to someone else's sister?
I'm sort of confused about your last sentence. Do you think that "Sister is outside" refers to someone else's sister or your own? To me it could only be the later, and then only rather idiosyncratically.
In any case, it seems the word here very much refers to one's own older sister: https://en.wiktionary.org/wiki/%E3%81%82%E3%81%AD#Japanese