can you please clarify?
IRS Publication 523 page 16:
Reporting Gain or Loss on Your Home Sale
Determine whether you need to report the gain from
your home. You need to report the gain if ANY of the following is true.
• You have taxable gain on your home sale (or on the residential portion of your property if you made sepa-
rate calculations for home and business) and don’t qualify to exclude all of the gain.
• You received a Form 1099-S. If so, you must report the sale on Form 8949 even if you have no taxable
gain to report. See Instructions for Form 8949 and Instructions for Schedule D for more details.
• You wish to report your gain as a taxable gain even though some or all of it is eligible for exclusion. You
may wish to do this if, for example, you plan to sell another main home within the next 2 years and are likely
to receive a larger gain from the sale of that property.
If you choose to report, rather than exclude, your taxable gain, you can undo that choice by filing an amen-
ded return within 3 years of the due date of your return for the year of the sale, excluding extensions.
If NONE of the three bullets above is true, you don’t need to report your home sale on your tax return.
If I don’t report this into the tax return, wouldn’t it be a red flag for the IRS?
No. If you have a bank account in a foreign country with you name on that account, that gets reported elsewhere on your tax return. It's also possible you would have to file a FBAR with the IRS, which is completely separate from your tax return. If money is transferred from that foreign account to a U.S. financial institution,
If a U.S. financial institution receives funds in your name from a foreign account, they (not you) are obligated to report the transfer to the IRS if the amount of the transfer exceeds $10,000. But that doesn't mean you may (or may not) be required to report it too. If you're required to report it, that's really got nothing to do with your tax return. See https://www.bossrevolution.com/en-us/blog/international-money-transfer-laws for the basics. Note that website is not an irs.gov website. So I can't speak for the accuracy of it. I just found it easy to comprehend and understand.
