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My wife and I have been green card holders since Sept 2012.
While we have very small income in India we hold substantial shares gifted by parents, home and some landed property.
I have my aged mother living in India who is an Indian citizen.
I understand sale of shares/mutual funds are taxed in US (though not taxed in India as long term capital gains)
What would be the best legal option to transfer money from sale of shares?
If my wife gifts the shares to my mother and she sells it. can she gift a part/whole of the proceeds to my US account without attracting tax?
Is this a good solution or is there any other alternative.
Basically US should not claim tax as the money was not transferred from US but earned in India prior to holding green card.

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It would be better for you to sell yourself and pay capital gains tax than to transfer to your parents and pay the gift tax.

Also, sham transfer (you transfer to your mother only so that she could sell and transfer back to you without you paying taxes) will be probably categorized as tax evasion, which is a criminal offense that could lead to your deportation.

What the US should or should not claim you can take to your congressman, but the fact is that the US does claim tax on capital gains even if you bought the asset before becoming US tax resident, and that's the current law.

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