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Sale of Foreign Property Using Indexed Value for Cost Basis

Forum|Forum|7 years ago
June 6, 2019
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India uses an index value to calculate Cost Basis can the same indexed value be used to calculate cost basis to report on US tax return for the sale of property in India ?

For example : cost of property was $10k indexed value was $15k and property sold for $20k.

Can $15k be used as cost basis and capital gains paid on $5k in US for the sale of property in India?

Capital Gain tax in India is 20 percent which essentially zeros the tax after taking a credit for foreign tax paid

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Best answer by TaxGuyBill

No, the US tax system does not use indexed Basis amounts. You must use the actual Adjusted Basis (for a personal-use property, that is usually the original purchase price plus cost of any improvements).

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TaxGuyBillAnswer

Employee

No, the US tax system does not use indexed Basis amounts. You must use the actual Adjusted Basis (for a personal-use property, that is usually the original purchase price plus cost of any improvements).

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Srinivas2022

Can we use Fair Market Value if the Foreign Real Estate is gifted by parents or do we need to use the original cost basis of parents for calculating capital gains?