Sale of Property in India

[ksh2025]

Hello,

I am a resident of Washington State.  In October 2024, I have sold a property in India which I owned 50% and my mother who is a resident Indian owned 50%.  The property was bought 16 years back and since the capital gains calculated in India considers an inflation index due to which the gains calculated are on lower side as compared to the US The buyer had deducted the TDS before paying the final amount. 

I had bought the flat 16 years back with my mother being the co-owner. The capital gains calculated in India considers an inflation index due to which the gains calculated will be lower than the TDS deducted, which means I am expecting refund on TDS deducted during sale of property in my 2025-26 Tax return in India as the capital gain on sale of property will be almost zero.

In that case, do I still need to pay capital gains tax in US and do we consider indexing rule while calculating capital gains tax in US for sale of property in India?

[pk]

@ksh2025 , Namaste ji.

(a)  when did you enter the USA and which visa ?

(b) when did you complete the sale of the condo in India ?

(c)  do you have any earnings in the USA and if  so ,  ball park figure, please?

(d)  What was your Acquistion cost for the  prop., cost of any improvements , how did you use it ,, how much did you sell it for  --- I need ball park figures.

Generally , if you are /were a US person ( Citizen/GreenCard/ Resident for tax purposes ) at the time of the sale , then  you would be subject to world income tax, including  any gains from sale of assets in India.   US does not use  indexing of basis ( like India does ), and the gain may be taxed  partly at marginal rate or at ca[pital rate ( depending on exact facts and circumstances ).

I will circle back once I hear from you  -- you can also PM me  if you are un-comfortable sharing details -- just NO PII  ( Personally Identifiable Information ) please.

[AmeliesUncle]

Indexing and TDS has nothing to do with US taxes, so they don't affect your US tax return.

After converting the purchase price and sales price to US dollars, if there is a gain you will need to report that gain on your US tax return.

If you have a mortgage on the property or if the property has been used as a rental property, I highly suggest that you go to a tax professional that is experienced with US tax from international sources.

Don't forget FBAR and FATCA forms, if they apply.  If you have not been filing those in the past (if they apply), I highly recommend going to a tax professional that is experienced with correcting those prior missed forms.