jtax
Level 10

Deductions & credits

@Critter is right. In terms of how much you'll pay this article explains the complex capital gains rates. It depends upon your gain and your other income.

 

https://www.nerdwallet.com/blog/taxes/capital-gains-tax-rates/

 

When @Critter says you will get the donor's basis and holding period this is what is meant. Your income from the sale of any capital asset (which this is) is the proceeds (money you get from the sale) minus your basis.  Your basis starts as the price you paid for the property but you all add in any improvements made to the property (e.g. renovations, adding a room, etc.).

 

For a gift where your sale results in a gain, your basis is your mother's basis. So you need to get that info from her including whatever paperwork you can get. 

The holding period is important also. More than 1 year and you get the really good long-term rates. That probably applies to you unless your mother recently bought that apartment.

 

Question: did your mother own the apartment with your father? If so is he still living? If not you might get a partial step-up in basis to its fair-market value for his half of the apartment as of his death. You'd have to make sure that applies to non-US citizens or properties. I'm not sure.

 

If there are Italian taxes that are part of the sale that you pay those reduce your gain. If there are taxes on the gain itself charged by Italy those may result in a credit for you on US tax. That could wipe out any US tax because US taxes are generally much lower. But it is complicated and doesn't always work out like that. Not carefully the different taxes. The credit against your INCOME tax only applies to foreign taxes based on your INCOME.

There are many posts in this form about selling foreign real estate. They may be helpful to you. See, for example, https://ttlc.intuit.com/community/tax-credits-deductions/discussion/taxes-on-foreign-home-sales/00/5...

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