The mortgage, mortgage payments, and payoff of the mortgage at closing do not affect the basis. Your basis is as I described in my earlier reply above.
You can deduct the mortgage interest and property tax that you paid after the estate was settled and you took title to the property. You can only deduct it in the year that you actually paid it, so you would have to file amended returns for those years. You can deduct property tax that you paid on any property you owned in the United States. But you can only deduct mortgage interest on your own primary home and one other home.
For 2018 through 2025, the total deduction for state and local taxes is limited to a maximum of $10,000 per year ($5,000 if you are married filing separately). The maximum applies to the total of real estate tax, personal property tax, and either state and local income tax or state and local sales tax.
