Do I have to report the property on my previous tax returns?
No, if it was not an income producing property, you do not need to report it on your previous tax returns. You will only report the home when you either receive rent from it or when you sell it.
Once we get it sold, and after we paid taxes upon the gains, do I have to report the selling here in US as well? Yes, if you are filing as a US Resident, then you would need to pay tax on the gains, if it does not qualify for the home sale exclusion. If you have not lived in the home for over the past three years it would not qualify as the home would have had to be your main home at least 2 out of the last 5 years in order to exclude the gain up to $500,000 for married filing jointly.
After you paid taxes on the gain in Spain, you may be eligible for a tax credit on your US return.
After that, the idea is to transfer all that money to our bank account here in US, do I have to report it, and when? Yes, if you have more than $10,000 in a foreign bank account you will need to report that. If you already have that, then you should be reporting it now as well. This is reported generally when you file your tax return, but is due on the last day to file your taxes which is usually April 15th (April 18th this year)
If the money is just immediately transferred from the buyer into your US account, this would not require the foreign bank reporting.
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