My dad purchased a flat for me in 2006 when I was an NRI, resident country USA. The money came from his bank account in India. The title of the flat was always in my name. I would like to sell the flat. I am aware that I am liable for a 20% capital gains tax in India if I do not reinvest the gains in real estate again. My question is regarding declaring and paying the taxes in the USA. Am I still liable if the funds came from my father's account ? The goal of the U.S govt, it seems, was to ensure that US citizens paid a fair share of the profits for investments made through off shoring. In my case, the money never came from the U.S.A and it seems unfair to pay taxes to uncle SAM when it had no contributions in how the money was made.
Am I still liable if the funds came from my father's account ?
Obviously yes. The original money came from your father (and was gift and I assume properly taxes). The profit from the sale is not "from your father" in any means - it is the gain in value in the years since purchase made on a flat in your name.
The devil now is in the details - double taxation agreements in particular. For which you WANT not to ask on the internet but talk to someone who can give you a qualified answer. Qualified not as in "random dude" but "somoene running a business and legally bound to compensate you for damages". "I asked on the internet" is a VERY bad reason not to pay fines if you get something wrong because of internet. "My accountant told me xxx" is a very valid answer that it was not your fault - and backed up by the accountant's liability insurance.