You may have a capital gain or loss when you sell the property. U.S. citizens and resident aliens are taxed on worldwide income so the sale of a property in Italy would generally be a taxable event.
You don’t say whether this is business, investment, or personal property. Capital gains from all types of property are taxable. You can deduct losses from the sale of a business or investment property, but losses from the sale of personal property (second home) are not deductible.
The cost of figuring the profit/loss from the sale of gifted property depends on whether it was sold for a gain or loss.
See What is the basis of property received as a gift?
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