Report property sale in another country

[vadimrapp]

I sold the home in Russia where I lived before I came to the US. That home was never purchased, it was privatized when USSR ceased to exist - before that it was government property, and my family lived in it long before I was born. This was the usual practice. If I understand correctly, I have to report this income to the IRS; but what would be the cost basis?

[Anonymous_]

It almost sounds as if there is no basis or, more to the point, the basis would be $0 as no consideration ever passed. You should probably consult with a tax professional or legal counsel familiar with that scenario.

I'll page Champ @pk to see if there is any input.

[Critter-3]

How did you come into possession of the property ?   Did you inherit it ? 

[vadimrapp]

> How did you come into possession of the property ?   Did you inherit it ? 

No, it was that process of privatizing. Until then people did not own the properties where they lived; but your address was registered with the government, i.e. the government owned the property, and there was government record that you occupied it. After Perestroika everybody got an opportunity to privatize the property where he lived, so by your request the government issued you a document saying that now you own this property where you were previously registered. That's what I did about 2 decades ago.

[Anonymous_]

Did you live there as your primary residence (main home) for 2 out the last 5 years leading up to the sale?

I suspect that's not the case and, if not, then you're going to have to use a zero basis or improvise. Re the latter, I can only suggest finding someone knowledgeable with respect to historical privatization values in that country.