If the probate process in the DR is as complicated/ red-taped as in India or Mexico ( the two foreign ones I am familiar with) then you should have both the valuation at the passing of your grandmother and that at transfer of title. US tax laws would require you to use the valuation at death as your basis for computing the capital gain. However , and I have no case law to support my position , I would argue that the transfer valuation should be used as basis because (a) it is only then that an official valuation is recognized by all and (b) the inheritor is totally prevented from doing anything with the asset till after the court has valued the asset and is unfair for the inheritor to be burdened with the earlier basis --- but that is only my opinion.
There is no taxation ( for US purposes) on the inheritance but there is capital gain/loss on disposition. Ideally because you are both on the title, you should each recognize a percentage of the asset as yours and so the gain/loss could be allocated ( unless of course you actually have a document that declares the share percentage for each owner. Else there is no hard and fast rule but you will need to keep documentation so if audited, you can show the logical path you followed.
Also note because this is foreign, any monies/ proceeds that stay in a foreign bank ( in DR perhaps ) would come under FBAR and FATCA regulations ----- you will need to do the needful ( filing the form 114 at
www.FinCen.gov for FBAR -- on line only and form 8938 for FATCA along with your return)
Does this answer your query or have I missed something?
Is there more I can do for you ?
