U.S. citizens are taxed on their worldwide income. They must figure gain or loss on the sale of foreign real property. If the foreign property is a residence, the home sale exclusion may apply. Note: If foreign taxes are paid on the sale, this may trigger a deduction or credit for those taxes.
A statutory term used to figure your profit or loss on a sale or exchange. Generally, it is sales proceeds plus mortgages assumed or taken subject to, less transaction expenses, such as commissions and legal costs.