@dhirenk2003 , having gone through the above and agreeing with the helpful answers from @Anonymous_ and @Carl , I would just like to comment on the "foreign" aspect of the transaction:
1. Recognizing that your inherited property was in India ( probably), the tax treatment of realestate in the USA is different from that of India --- US uses the inheritor's basis in the property as Fair Market Value at the time of demise of the decedent; India uses an indexed valuation system.
2, For purpose of US taxes , you would need to use exchange rate at the time of death of the decedent ( for basis translation to US$ ) and again at disposition --- assuming that you sold the property quite some time post the inheritance. ( usual case )
3. If you wish to avail yourself of foreign tax credit on disposition of the asset, you will need to tell TurboTax that you have foreign tax credit , which will then require you to fill out form 1116 --- note that form 1116 ( in the forms mode ) will need to be inputted with the foreign income ( i.e. gain before taxes but after all sales expenses ). TurboTax will then compute allowable foreign tax credit ( based on a ratio of foreign income to world income).
4. Alternatively foreign tax can also be used as a deduction if you itemize but subject to SALT limits.
5. If you had the inherited prop. rented out for profit, then ( and assuming that you have recognized the income and depreciation on Schedule-E), the basis is eroded by accumulated allowable depreciation ( whether recognized or not ) and the portion of the equal to the depreciation is treated as ordinary gain/income and taxed as such.
Have I missed something ?
Is there more I can do for you ?
Namaste ji
pk
