Inherited property (namely land) is not taxable or reportable by the named beneficiary recipient on any tax return. However, if the beneficiary recipient sells that property, then the beneficiary recipient will pay tax on the gain, if sold for a gain.
First, the beneficiary recipient must determine what their cost basis for the land is. There cost basis is the FMV of the land on the day the deceased owner they inherited it from, passed away. (not the day the property was deeded to them.)
If the property is sold for more than the FMV, then the amount over the FMV is taxable income to the seller. Additionally, there's the possibility that if this is raw land it may be considered an investment for the seller. So if owned by the seller for less than a year, the seller would pay the higher short term capital gains tax on any gain realized from the sale. So keep that in mind when negotiating your selling price.
