@jjayarama , as I understand your situation 1. you inherited a property in India with a then FMV of XXXX US$ equivalend. Subsequently you sold the property within six months for actual YYYYUS$ equivalent. India's tax based basis indexing and sold price is IIIIUS$ equivalent. Yes ?
(a) Because this is within such a short time since the demise of the decedent ( especially in India ), one could reasonably substitute the sales figure as the FMV for six moth earlier.
(b) This would imply that for US tax purposes there is probably a small loss on expenses for preparation for sale, sales commission, transfer tax , currency fluctuation etc.
(c) Thus your foreign income is a small longterm capital loss.
(d) In this scenario, the foreign tax credit ( recognized dollar for dollar ) allowed for the current year would be zero because it is based on a ratio of foreign income to world income based total tax allocation.
If on the other hand you want to apply the US rules as intended for US situations, then you have to get an appraisal for the property as of the date of demise of the decedent as your BASIS and then follow through as above. Knowing India as I do, I don't believe you will see that much of a difference in the FMV in six months barring special situations ( mostly because deal making especially landed property in India takes a very longtime and there is very little speculation -- the buyer knows the potential very well .
I have personally dealt with similar situations in Mexico and six months no make no diff.
pk
