Simply owning property is not reported.
If you pay property taxes, you can list those taxes as part of your itemized deductions (up to a total of $10,000 for all state and local taxes). If there is a mortgage on the property and you assumed the mortgage, you may be able to deduct the interest you pay, if the mortgage was used to buy or improve the property.
However, when and if you sell the property, you will pay capital gains tax based on the difference between the selling price and your cost basis. For this type of deed, your cost basis is the fair market value on the date the prior owner died, plus any improvements you make after that date. So you may want to get a real estate appraisal to save with your other important tax papers until you sell the home.
