@sunil_kuchipudi ,
(A) you have two choices as to filing your US return-- (1) file now with the information you have and then comeback and amend your return in line with Indian IT settled return ( i.e. after the Indian taxes have been finalized / settled ) --- note that India uses basis indexing while US does not and so Indian taxes may be different than the TDS amount OR (2) file for an extension with the iRS before the 15th of April and once all the dust has settled with Indian taxes then file your return ( both Fed and State )
(B ) Because you have used the property for income ( rental ), hopefully you have been reporting the income from India on Schedule-E every year. There also should have been depreciation declared. This depreciation accumulated over the years would reduce the US basis of the property , thus increasing the gain and therefore taxation. Your State would also want a cut of this
(C) Your US basis of the property is Fair Market Value of the property on the day of death of the decedent or an alternate date within six months -- US does not index the basis -- it remains the same as at the start. To this you add all the cost(s) of improvements
(D) if you did not recognize the depreciation over the years , you can let TurboTax recompute it for --- you enter the original basis ( FMV on the day of death ) in US$ of the day; any associated land value ( not depreciable ) ; the date on which you made the property available for rent; that the property is foreign residential --- these will allow TurboTax to compute the allowable accumulated depreciation
If there is more you need on this please feel welcome to comment / ask ( either here or PM )
Namaste Ji
