@yodawalle123 , assuming that you are a US person ( citizen/GreenCard / Resident for Tax purposes ) and for US purposes :
1. In your particular case this being un-developed land, there is no depreciation to consider, your gain/loss = Sales Proceeds ( which is Sales Price LESS sales expenses such as agent commission, recording fees , Escritura costs such as Notario charges/fees etc. etc. ) LESS Basis ( which is your acquisition cost plus cost of any improvements like fencing etc. ). TurboTax will generally collect these bits of info and fill out the form 8949 / Schedule D and on to form 1040.
2. Note all the figures are in US$ and generally using either dollar of the day or yearly average or similar. So if your acquisition was in 2016 say, you need to use the yearly average for that year to convert to US$. Please keep record of which exchange rate and source your used ( in case of a challenge ).
3. Mexico collects IVA on all transactions -- this is a value added tax. This does not appear anywhere on the US return -- NOR is it eligible for Foreign Tax Credit.
4. Once you are done with this portion i.e. entry of the income from the sale of the asset in Mexico, you move to the Deductions and Credits section . Here you can claim Foreign Tax Credit / Deduction to reduce the double Taxation bite. TurboTax will walk you through filling out form 1116 ( Foreign Tax Credit).
5. Since US and Mexico has a Tax Treaty in effect, the form 1116 will need the following details to compute the credit ( to reduce your US tax burden ). Foreign Source Income -- this the gross gain from the transaction -- generally this will be the same as the gain computed under US tax laws, as explained above. Foreign Tax Paid -- this is the total tax you have paid to Mexico . Note that this does not include IVA -- it is ONLY the INCOME TAX / Capital Gains Tax you have paid. This is because the treaty covers only income tax and excise taxes.
6. While the full amount of income tax paid is recognized ( dollar for dollar ), the allowable Foreign Tax Credit is the lesser of actual paid to foreign taxing authority and that imposed by US on the same doubly taxed income. The rest is banked and can be carried back one year or forward for 10 years. Note that to use the banked/carried forward FTC, you must have Foreign Source Income in any year that wish to use the credit.
Does this answer your query ? Is there more I can do for you ?
