HenryDavid wrote:I don't think a "step-up" is going to be permitted here. Did the individual have to pay tax to China on moving to the US? Or will the individual have to pay tax to China when the property is sold, in which case, perhaps an FTC might be claimed in the US?
If the property was sold tomorrow, would the personal residence exclusion possibly apply (I don't know the answer to this offhand)?
HenryDavid, thank you so much for the reply.
- I checked various sources as well and I think you are right that the "step up" does not apply here.
- I believe Foreign Tax Credit (FTC) does apply, however in Shenzhen China it is usually the buyer that pays tax.
- I also think the 121 exclusion applies but as the prices raises so rapidly, the exclusion helps but no much.
I would like to make sure I do things right. After posting my question and getting replies, I become confident that I did not miss anything. I appreciate your help.