@flyoverfred , I am gratified for all the excellent explanations provided by @Opus 17 to this discussion. However, I just wanted to add a little and possibly very minor points ( even if some of these may be repetitious ---
1. for US tax purposes the computation of gain on such a transaction is per US tax rules -- which may be very different from that of the "other" country;
2. Taxable Rental Income reported on Schedule-E again is per US tax rules and may be very different from the country where the property is located;
3. The accumulated depreciation used for purposes of gain computation and for recapture ( i.e. gain taxed as ordinary income ), is irrespective of whether the taxpayer recognized/ took-advantage-of over the years and again is per the US tax laws at the time of the start of rental period;
4 if the rental income over the years were not reported on US tax income during prior years, then those returns need to corrected/ reconciled, even though any taxes due would require to be paid, any refunds are time limited; Similarly the foreign tax credits ( if any ) associated with this foreign income ( rental income ) may be time and quantum limited; I bring this up because I want to be sure that you did recognize these rental incomes over the years ( for US tax purposes ) or you do need to clear this up -- because the recognition of sale of the property may trigger IRS look back ;
5. FBAR and FATCA generally are not tax events but when in doubt , please file the reports because non-filing can lead to quite onerous penalties
regards
pk
