I am a US citizen of russian origin. I am selling my ancestral house in russia for about $350,000. Due to Perestroika we all got properties from communists into ownership for free. There is no way to calculate capital gain. Can I claim that this is my primary home? I have lived in the States for last 10 years, but always rented, never owned the property. How to fill out Schedule D in that case? What should I do to minimize tax implications?

HOW did you get ownership, via gift or inheritance?

Also need to know WHEN title was transferred.

Your tax basis is likely zero unless you have made improvements to the property. Show the full amount of proceeds as long term capital gain. You cannot claim an exclusion.

Dear All Thank you for your responses. To answer questions about the ownership. The privatization papers that were transferring property from the State in equal shares to me, my grandma and my dad are dated in the late 90s. Then my gran died and my father was in the process of inheriting her part of the property when he died. Now I owned 1/3 of the home and recently (1 month) came into inheritance of the rest of the shares. Full title of the ownership dated in the recent days, but what about privatization then?

I agree with IntlTax; the basis IS probably zero, and the proceeds will be reported as long-term capital gains. Depending on your income level, you will pay 5% or 15% in capital gains tax.

Thank you very much for all your help!

Glad to help!