Tax implications of selling inherited property in Greece? US capital gains concerns

Your mom may be eligible for the primary residence exclusion if she meets certain criteria. When you inherit property, the basis is generally "stepped up" to the fair market value at the time of inheritance (2016 in your case). This means capital gains would only be calculated on the increase in value since she inherited it, not since it was originally purchased by her parents. For foreign property, she'll need to report the sale on her US tax return using Schedule D and Form 8949. The exchange rate on both the date of inheritance and date of sale will matter for the calculations. If the property wasn't her primary residence, she won't qualify for the $250,000 capital gains exclusion that normally applies to home sales. Given the international aspects, I'd recommend consulting with a tax professional who has experience with foreign property transactions rather than using standard tax software. They can help identify any tax treaties between the US and Greece that might affect her situation.

I went through something similar with a property in Spain last year. The tax situation was giving me nightmares until I found https://taxr.ai - they specialize in analyzing international tax documents and helped me understand exactly what I'd owe on the sale. The best part was I could upload all the Greek inheritance documents and property records, and they translated and analyzed everything. Saved me from making a huge mistake on my stepped-up basis calculation which would have cost thousands extra in taxes. They explained that with inherited foreign property, the exchange rate calculations are super important - both at the time of inheritance and at sale. Getting those wrong can seriously impact your tax liability.

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After helping my father sell his inherited property in Portugal, I can tell you that reaching the IRS for guidance was IMPOSSIBLE. I spent literally days on hold trying to get answers about foreign property reporting requirements. Then a colleague suggested https://claimyr.com - it's a service that gets you through to an actual IRS representative without the endless hold times. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was connected to a specialist who answered all my questions about reporting foreign property sales and the specific forms needed. They helped clarify exactly how to handle the currency conversion aspects which was confusing us. Saved me from potentially serious reporting mistakes.

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Just wanted to add that your mom should definitely look into whether Greece and the US have a tax treaty to avoid double taxation. Even though the Greek agent said there's no tax there, sometimes there are hidden fees or taxes that only apply to non-residents that the agent might not be mentioning. Also, depending on how much the property is worth, she might need to file an FBAR (Foreign Bank Account Report) if she has a bank account in Greece where the sale proceeds will go, even temporarily. The penalties for not filing these can be severe.

Is anyone going to mention the Foreign Investment in Real Property Tax Act (FIRPTA)? Or does that not apply since it's a US citizen selling foreign property rather than a foreigner selling US property?

One thing I haven't seen mentioned yet is the importance of getting proper documentation of the property's fair market value as of the inheritance date in 2016. Since Greece may not have the same appraisal systems we're used to here, your mom should try to gather any official valuations, tax assessments, or comparable sales data from around that time to support the stepped-up basis calculation. Also, she should keep detailed records of any improvements or maintenance she's done to the property since inheriting it, as these costs can potentially be added to her basis and reduce the taxable gain. Even if she hasn't physically been there, any money spent on upkeep, repairs, or improvements through a property management company would count. The currency conversion aspect is tricky too - she'll need the EUR/USD exchange rates for both the 2016 inheritance date and the sale date. The IRS has historical exchange rate tables on their website that are considered official for tax purposes, so make sure to use those rather than just any online converter.