Selling a primary residence abroad.

[GeorgeAH]

I'm contemplating to sell my primary residence abroad and move back to the US. I've been living in 12 years.  I am hoping to have some capital gain.  This capital gain will be taxed in the country where the primary resident is.  Do I still have to pay US tax on the capital gain?  If so, what would be the formula to calculate the US tax?  Appreciate it.

[DoninGA · Accepted solution]

The sale of a personal residence, either in the US or overseas, is reported in the same way and any capital gains are calculated in the same way.

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in and owned the home for two years).  

If you had a gain greater then the exclusion amounts then you would have to report the sale and the gains on your federal tax return.

See this IRS worksheet to calculate taxes on capital gains - https://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Sale of Home (gain or loss), click the start or update button