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I am sorry for the loss of your father. 

As the previous expert explained inheritances are not generally taxable.

However you would have a taxable event when the inherited property is sold

In general, you will report your capital gains  or losses,  from inherited property on Form 8949/Schedule D, like other property. 

You will use the fair market value at the date of death as the basis in the property and you will need to indicate it was an inherited property. You will then report the amount of the  sales price, (minus any seller-paid settlement costs), as the amount realized. If your share of the amount realized is less than your basis, you will then  have a capital loss on your inherited property. If your share of the amount realized is more than your basis , you would have a gain.

Also worth noting, if this property was inherited by multiple individuals, you would divide the basis and realized amounts by the total number of individuals, and only report your individual share.  

For example, if the fair market value of the inherited property were $300,000, and there were 4 of you who inherited it, your basis would be $75,000, and if you sold the property for $600,000, your realized gain would be $150,000, each, and ultimately, you would each then have a  capital gain of $75,000.

• $300,000/4=$75,000, basis 
• $600,000/4=$150,000, realize gain
• $150,000-$75,000=$75,000, capital gain

To claim a loss on the sale of the property the following would have to apply:

• You sold the house in an arm’s length transaction.
• You sold the house to an unrelated person.
• You didn’t use the property for personal purposes.
• You didn’t intend to convert the property to personal use before the sale.

For more information check out:

Is this inheritance taxable? 

Gifts and Inheritances 

PUB 551 Basis of Assets 

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