@annava17 ,
(a) as a US person ( citizen/ GreenCard / Resident for Tax purposes ) US will tax you on your world income. Thus you have to report this foreign asset sale to the US on the return for the tax year when the sale was consummated.
(b) Note that for US purposes your basis in the property is the sum of the costs to acquire and those of improvements that you did during your period of owning the property. Also this basis is reduced by any allowable depreciation during those years that the property was used as income property ( like rented out ). So for all properties the Adjusted Basis is the basis adjusted for accumulated depreciation. This final basis is called Adjusted Basis.
(c) Your Capital gain for US purposes is the Proceeds from the sale ( Sales price LESS any sales expenses like sales commission, legal work, transfer taxes paid etc. etc.) LESS the Adjusted Basis . And the US will tax you on this Capital Gain ---- that portion of the gain caused by the accumulated depreciation is taxed as ordinary gain ( taxed at your marginal rate ) while the rest is taxed at capital gain rate ( 0%, 10% , 15% etc. )
(d) If the foreign taxing authority taxed this transaction as income the that tax amount is eligible to be treated as Foreign Tax Credit ( FTC ) or as deduction if you itemize and so choose to.
(e) Note that the gain computation has nothing to do with how the gain may be computed by the foreign taxing authority ( e.g. many countries use an indexing method to adjust the basis in the property ).
(f) transferring the monies from the foreign country to the USA is NOT a tax event.
A last point --- since I have no knowledge of the On-line version of TurboTax, I can only speak about the Windows downloaded / CD version of the product. I kl now for sure that the Home & Business version of the windows product is perfectly capable ( and is my favorite ) to deal with all these complex issues. It will guide you in preparing a correct return .
That is my view.
Is there more I can do for you ?
I am not a beneficiary and/or connected to TurboTax in any way -- just a volunteer helping users.
