Q. If North Carolina state does not give me foreign tax credit then does that mean that the entire capital gains would be taxed again in North Carolina despite me having paid tax on it in another country
Yes and No. All income you receive when living in the US is taxed by multiple government entities (Federal, State and Local). When you receive the credit for foreign taxes paid by the federal, you are still being taxed in the same way. If you sold the property in another state, then you may be eligible for a state credit to offset your taxes paid to the other state, but this is comparable to the state not giving you a credit for paying federal taxes.
Q. If yes, would it be like ordinary income or at a long term gains tax rate?
If you owned the home for 15 years, it would be a long term gain, however, NC does not have a special capital gains tax rate. It is taxed at the same 5.25% rate of the rest of your income.
Q. How would IRS and NC state treat my gains in that case?
You would still be taxed under US and NC rules. Meaning, if you received the income, even if you turn around and invest it in something else, you would be taxed on that income the same as if you did not invest it in bonds.
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