Hello,
I have a difficult tax question and hope someone knows the answer here:)
1. I got a house gifted in Austria from my parents in 2013.
2. I got my green card in 2019 and became PR during that tax year.
3. I am now selling the house in 2022.
4. The tax treaty between Austria and USA says that taxes for real property sales need to be taxed in the country of the property.
5. Based on other similar threads on VJ, I assume that If capital gain tax is calculated in USA, it is on the profit calculated based on the house worth on the day of my immigration (2019)
and the difference to the sales price.
Now my questions:
a) Is there a link to IRS that says the basis of the house is the worth of the date of immigrating? I could not find anything like that to be honest in writing although it has been mentioned as a rule on VJ.
b) Do I still need to pay capital gain tax in USA if the double tax treaty says that taxation is made in the other country? I assume in that case I can deduct the tax paid abroad but the double tax treaty should
actually prevent paying taxes in 2 countries.
c) I do not know the exact worth of the house in 2019. Is it ok to estimate as follows: house sales price 2022 - average price increase of similar properties in Austria for 2021,2020,2019? I would check how much similar properties appreciated in that period of time and estimate the worth based on that?
Thanks for the help!