I'm an Indian citizen and currently on H-1B in US. My father and mother bought a property in Dec 1997 in India.
My mother passed away in 2022. As my father and mother had 50-50 ownership. Our assumption is that post her death the ownership of her 50% was equally divided between me and my father. So ownership was changed to, father's = 50+ 25 = 75% and for me 25%.
The property was our primary residence until April 2015 and then it was rented on and off from 2015 until Nov 2022. From Nov 2022 it was vacant. We sold the property, agreement date of Aug 2024 for Rs. 2,400K (24L), less than the market price of approx. Rs. 2,9K (29.28L) as it was tough selling an older property.
This would mean my share based on assumption of 25% is Rs.600K (6L) on the property sale.
We used all the money of Rs. 2,400k (24L) to buy an under construction property in Oct 2024.
What will be the US tax implications for this sale?
1. Is the sale price of Rs. 600K (6L) converted to USD depending on forex rate for property sale date?
2. Is the FMV on inheritance acquired date, i.e., the date when my mother passed away, is used as cost price? If that is so, how to calculate FMV for the property then?
3. Will the cost basis be FMV or 25% of FMV?
4. I was a resident of Michigan in 2024. What would be tax implications for federal and MI?
Since it's a combination of inhertied property and foreign sale, I haven't been able to find answers thst covers both aspects.
