sale of non-rental property in india

[src_101]

I purchased a property in India in 2011 for 20000, lets say, and sold it in 2021 for 40000. Over the years, I spent 2000 on the property for painting and maintenance. After the sale, I paid about 2000 USD as capital gains tax in India. I dont have a 1099 for this.

How do I show this income in turbotax premier 2021?

What are the pitfalls? Should I have any depreciation? Any other concerns? If my actual capital gains (non depreciated) is 18000, and i paid 2000 in tax, how much should i realistically owe?

[DaveF1006]

It depends.  Before we get started, what kind of property is it? Was it land or was it a combination of land and building? Also did you rent the property or did it remain vacant for investment purposes? We need a few more details about your property before we can render a tax opinion.

[src_101]

 Hey Dave,

It was a house, similar to a townhome here, so it stood on its own land, but shared walls with other houses. It was vacant for the whole time I owned it. Any other details?

Thanks

[DaveF1006 · Accepted solution]

Yes, this does tell me a lot. First of all, there is no depreciation to be taken into account because it was never a rental property. It was held strictly for investment purposes. 

As far as painting and maintenance, these are not generally considered improvements but an expense for maintaining your property. Since you did not use this as a rental, painting and maintenance costs are not deductible nor are the property taxes you paid while you owned the property.

To report:

1. Log into Turbo Tax Premier
2. Go to federal>wages and income

3. Investment Income>Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)>start

4. Answer the questions in the next couple of screens. Where it asks OK, let's start with one investment type indicate other.

5. Mention who brokered the sale.

6. When it asks what type of investment is it, say other.

7. Then finish out the section where it asks costs, basis, proceeds, date purchased and date of sale. All this information will determine the long term capital gain. In this scenario, your basis is $20K while your proceeds are $40K. Assuming you no other capital gains to report, your capital gain for $20,000 could be 0% if your taxable income is less than or equal to $40,400 for single or $80,800 for married filing jointly or qualifying widow(er). 

8. If you are assessed a long term capital gains tax you may be entitled to a foreign tax credit for the capital gains tax you paid in India.

9. If this is the case, go to federal>deductions and credits>estimate and other taxes paid>Foreign Tax Credit. 

[tadada]

@DaveF1006 -- I am in a similar situation, except that the property that I sold was an apartment and my mom used to live there (also, I used to live there with my mom before I moved to the US back in 2019).

Can you please confirm if anything changes for me or should I just follow the steps you mentioned in your answer here?  Also, I live in California, so do I also need to pay California State Taxes for this sale of the property?

[AmeliesUncle]

Was there a loan/mortgage on the property?   If so, there are complex laws (§988) involved, and you really need to go to a tax professional that SPECIALIZES in international taxation.