1. If you owned a foreign bank account for even 1 day during 2023 that contained more than $10,000 US-equivalent, you need to file the FBAR.
2. You report the sale of the property according to US law, regardless of what other reporting requirements might exist overseas. Your cost basis when you inherited the property will generally be the fair market value at the time. You don't get an adjustment for inflation under US law. If you sold the property for less than your cost basis, you have a capital loss, why not deduct it?
But, note that you can't deduct a loss on personal property, only investment property. This would be personal property if, for example, it was a family home, and other family members stayed their rent free, even occasionally. Or you used it as a vacation home. It could be treated as an investment property if you rented it out after inheriting it, or it was vacant--not used as a personal home by yourself or family but waiting for the right time to sell.
If you treat this as investment property and you have a loss, you can report the loss and take a tax deduction. However, if audited, you will be asked to prove your cost basis, that is to say, the fair market value when you inherited it. Did you get an appraisal at the time? Can you now get a retroactive appraisal using historical market data from a qualified appraiser in that country?
3. No, you only inherited the property once. Selling it does not trigger a requirement for another form 3520 since you were selling your own property.
