Personally, you and your sister will not have any additional tax forms to complete regarding the inheritance of your late-father's home. Nor will you receive anything tax-related in the mail regarding the inheritance of the property. At this point, there is nothing taxable with this transaction in the eyes of the IRS.
If and when you decide to sell the home, that's a different story. When you sell, you owe capital gains taxes only on any gains made since you inherited it. The cost basis of your inherited home is the value of the home on the date of death of the decedent (your father), and not the original purchase price. This is known as a stepped-up cost basis, courtesy of the IRS. If you sell the home for more than your stepped-up cost basis, you will owe capital gains taxes.
