inherited property - need to sell

You need to determine the fair market value of the property at the time you inherited it (generally, this means the date of death of your late husband, if he was the owner of the property). That is the new basis that you receive in the property for purposes of calculating capital gains or losses on a sale. Then, when you sell the property, in very big-picture terms, you subtract your basis from the sales price to determine the capital gains on the sale. The capital gains are subject to income taxes; the rest would be a recovery of your basis and not be subject to income taxes. The entire sales proceeds and your basis must be reported to the IRS on your income tax return, but not all of the sales proceeds would be taxable unless you have a $0 basis.