My wife, who is a resident alien, received an inheritance from the death of her mother who was a Spanish citizen. We paid taxes in Spain. Do we report it?

You most likely will not have to report the inheritance on your federal tax return, since the IRS does not impose an inheritance tax.

https://ttlc.intuit.com/replies/3300476 

However, depending on the kind of inheritance, you may have to pay taxes on any earnings from the inheritance. Please see this great answer below which may provide more detailed information about your situation.

https://ttlc.intuit.com/replies/3369128