@vijdam , Having gone through your post and great comments / help by @Critter-3 and @rjs , I would like point out the following ( you may already be aware of and if not :(
1. Please change your sign-in name -- it is too close to an email address ( just in case)
2. The basis of the inherited asset/property is the Fair Market Value of the prop. on the day of the demise of the decedent. Hopefully you have it and if not you need to find it and change to US$ at then exchange rate. Note that for India tax purposes you would be using an indexed valuation and this may or may not be the basis .
3. If the sale is occurring after a period and the property was rented out for profit, then (a) the such income would have been taxable income in the USA and (b) there were allowable depreciation.
4. If the prop. was rented till sale, then your basis is eroded by the accumulated depreciation. Thus your basis becomes Adjusted basis = Acquisition basis LESS allowable accumulated depreciation. Also your Sales proceeds is reduced by the sales cost such as commission, required repairs etc. , transfer tax etc. etc. thus giving you adjusted sales proceeds.
You gain for US purposes than is Adjusted Sales Proceeds LESS Adjusted Basis all in US$ at published / applicable rates.
5. If you have to pay income tax on the gain on the disposition of the asset , because there is foreign source income that is being taxed by both US and India , you can ask for foreign tax credit or deduction.
Do you need more help on this ?
pk
