@jkbasak , for US tax purposes ,
(a) you treat a foreign asset alienation/sale just like a domestic asset sale. The gain/loss computation uses 1. Sales Proceeds ( =Sales Price LESS sales expenses such as preparation for sales expenses, transfer tax, title work cost, commission etc. )
2. Adjusted Basis ( = Acquisition cost + cost of any improvements over the holding period LESS accumulated allowable depreciation )
3. Period of holding,.
(b) If there is gain per US rules, then the portion of the gain caused by accumulated depreciation is treated as ordinary gain ( taxed at your marginal rate -- recovery ) and the rest is eligible for capital gain tax treatment.
(c) For Foreign tax credit ( reducing the impact of the same income being taxed by both taxing authorities and as per Tax treaty between US and the "other country"), the foreign source income is only that which is being doubly taxed ( when multiple taxing authorities are in volved, then an allocation process is required ).
(d) While US recognizes dollar for dollar the taxes paid to foreign taxing authority(ies), the allowable amount for the year is the lesser of the US tax or actual paid to foreign govt.
Thus , when you enter the Foreign Gross income there is no deduction for TDS -- the TDS shows up as Foreign taxes paid.
Does this make sense ?
Is there more I can do for you ?
