@ssr1 , I am so sorry for your loss.
As I understand the situation ---
1. You a US person and having a US tax-home.
2. You father passed ( when ? ) and you are one of three inheritors of his estate.
3. A large plot of land ( what Fair Market Value at time of the passing ? ) is now being disposed of (is the property still in the name of the decedent / estate or by the inheritors ?) .
4. Property/ asset is land only ( how was / is it being currently used ?)
For US tax purposes:
(a) A valuation of the asset within a short period of the passing of the decedent is required as this becomes the "basis " for gain computation.
(b) If the estate sells the asset , pays the local taxes and then transfers your share as cash, then there is nothing for you to report other than that you have received an inheritance in cash form --- there may be requirement to file form 3520 ( cash from a foreign estate/trust), FBAR form ( form 114 at FinCen.gov and only on-line filing) and FATCA form 8938 along with your return. The last two items if , and only if , you have/had a foreign bank and/or financial account(s) and the monies passed through / held in those accounts.
(c) If the asset was transferred to your name ( joint ownership) and you are now disposing of the asset, then you will have to recognize the gain as part of your US return. As a joint owner , you will need to use 1/3rd of the FMV as your basis , 1/3 of the sales proceeds ( sales price LESS sales expenses allowed under US tax laws such as sales commission, sales preparation / advertising , transfer tax etc. etc. ) to compute the gain. And if any income/gain taxes were paid to India as part of this alienation of ownership then 1/3 of this is eligible for foreign tax credit treatment using form 1116 as part of your return.
(d) Note here
(i) that while India still allows indexing of basis ( 20% with indexing or 12.5% without indexing ) US does not. AS an owner ( assuming the property was in your name as a joint owner ), you will have to file and return ( ITR ) and recognize the disposition and gain thereon under Indian laws.
(ii) Recognize the Tax calendar difference between India ( Apr 1st through Mar 31st of the following year ) and US ( Calendar year ) -- thus perhaps delaying US filing till the Indian ITR is settled or having to amend the US return, based on Foreign Taxes Paid.
As you can see from the above, my answers are kind of general. For a more specificity, I need the answers to my questions ( above ).
If you wish to cover this away from the general public you can PM me -- just NO PII ( Personally Identifiable Information). Else you can post your answers and questions here.
Namaste ji
pk
