On the sale of inherited property, fair market value of the home on the date of your grandmother's death is treated as your cost basis for determining the capital gain. With multiple beneficiaries, the sales proceeds and the inherited basis is split between the beneficiaries.
Since there was no gain on the sale, there would be no capital gains tax.
However, there would be a capital loss on the sale that could be partially deducted in the current year (up to 3,000 dollars) and each following year until the entire loss is fully deducted.
