The cost basis of inherited property "steps up" to the fair market value on the date of death. So, you most likely will have no capital gains to report when you sell the property. In fact, most people have a capital loss to report, considering the expenses of sale.
You may not deduct a loss on the sale of personal use property. The "personal use" would be based on how you used the property, after inheriting it. If it sat vacant, the property would be considered investment property and the loss deductible.
