Re Foreign real estate Inheritance, sale and taxes.
My husband inherited an apartment located in Germany worth about $100K in 2018. At the time he paid $15K in inheritance taxes. I did not report that as foreign taxes at the time. (We are US Citizens living in US filing jointly.)
It was soon rented and we reported that income, expenses, and related German taxes in 2018 and 2019.
He sold the apartment this year. I don't know yet what the net profit or loss will be.
I reported a small amount of foreign divided income and foreign taxes paid on those dividends, but did not report the $15K in inheritance taxes on our 2018 return? Should I have, and if so, where? Or do I report it in the year of the sale of the property? I tried going through the amended tax return process for our 2018 taxes in Turbotax, and adding the amount to the foreign inheritance taxes paid, but it's saying I would owe more money by including the $15K paid in foreign taxes. Since the property wasn't sold in the year the the inheritance taxes were paid, there wasn't much foreign income against which to deduct the taxes.
Second question: In figuring out the net profit or loss, do I figure out USD sale price minus USD inherited value (conversion rate at the time of each individual transaction), or do Euro sale price minus Euro inherited value, and then convert to USD using the conversion rate at the time of sale? Do I deduct the inheritance tax paid in 2018 from the 2020 sales price? (with same Euro / USD question).
Thanks for any help you can offer.
