If you are a US taxpayer (US citizen, or permanent resident/green card holder) then you must report and pay tax on all your worldwide income. There is a credit for foreign taxes if you paid them.
You would fill out a regular 1040 tax return with a schedule D for gains and losses from selling capital property.
You can't use the special rule for excluding gain from residential property since you never lived there, so you will owe capital gains tax on the gain. The gain is the difference between the selling price and your cost basis. If you inherited the home, your cost basis is the fair market value on the date the previous owner died. You will need to make a reasonable effort to determine this, for example, by contacting an appraiser who can use historical records of selling prices of similar homes around the time of your grandfather's death.
Now, it so happens that the capital gains tax rate is 0% for single filers whose income is less than $37,000. Above that the gains tax rate is 15%. So even though you are required to file a tax return and report the gain, you might owe no tax if it is true you have no other taxable income, and the overall gain in value since your father's death is less than $37,000.
