1. Yes, it is correct that in the USA, the gain is calculated by taking the sale price of the property less the value of the property at the time the property was inherited.
2. As far as who makes the determination of the value, in the US that is fairly easy to do. First, in the US you can use property tax records to determine the current assessed value of the home. You can also simply get an appraisal on the property.
Since the property you inherited is in India, those choices may not be as readily available. But it would be reasonable to assume that if you sold this property within a short time period after you inherited, then the property itself could not possibly have appreciated much, if at all, by the time you sold it. And I believe that based on that fact, the IRS would accept your selling price to be the same as your basis.
On the other hand if you held this property for one or two or three years after you inherited it before you put it up for sale, then the property could have conceivably increased in value from the time you received it as an inheritance. If that would be the case, you would need to try to get an estimate from someone who works in India with real estate assessments
who could give you an estimate of what the value would have been when you inherited the property.
But if the sale was within a year of you inheriting the property, I would say you are safe to claim the selling price and the basis as being the same.
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