step up basis

[czekchik]

i inherited my mothers apartment overseas in 2023 with my brother. we are selling it this year and splitting the proceeds. i know this will be worked on 2027 taxes but trying to get ahead of things. i will receive my split of proceeds which is over $100K which will be deposited into my foreign bank account and then i will transfer it to my US bank account. i know i will have to file different forms but my main question is if  the step up basis is calculated as half since i am splitting with my sibling same as the proceeds (my half) for the calculation of the capital gains? also we are paying fees for the sale to the real estate agency overseas, can i include that to up the step up basis reducing my portion of profit for the capital gains calculation? also can you confirm what all forms will be needed? i have done research but want to confirm i am not missing anything. thank you

[Mike9241]

Step-up basis when the owner dies is generally the market value on the date of death This becomes your tax basis that is split among the heirs based on the ownership %'s 

Your gain would be your share of the selling price, less selling expenses (converted to US $), less your tax basis converted to US $, but at the historical conversion rate on the date of death. 

You may have to report this in the foreign country and pay that country's income taxes on the sale. If you do, you can take a deduction or credit for the foreign taxes paid. Inherited property gets long-term capital gain/loss treatment on your US income tax return 

For US income tax purposes, Form 8949 and Schedule D. For the foreign taxes, if any, schedule A if deducted or Form 1116 if you take the credit (usually best). In addition, if you have a state income tax, you may have to pay state taxes on the gain. Every state with an income tax has its own rules.