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Publication 516

Other Taxable Income(p4)

Some other income items that may apply to U.S. Government civilian employees stationed abroad are discussed in this section.

Sale of personal property.(p4)

If you have a gain from the sale of your personal property (such as an automobile or a home appliance), whether directly or through a favorable exchange rate in converting the proceeds to U.S. dollars, the excess of the amount received in U.S. dollars over the cost or other basis of the property is a capital gain. Capital gains are reported on Schedule D (Form 1040), Capital Gains and Losses. However, losses from sales of your personal property, whether directly or through an unfavorable exchange rate, are not deductible.

Sale of your home.(p4)

All or part of the gain on the sale of your main home, within or outside the United States, may be taxable. Losses are not deductible.
You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return). Generally, you must have owned and used the home as your main residence for two of the five years preceding the date of sale.
You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse is serving on qualified official extended duty as a member of the Foreign Service of the United States, as an employee of the intelligence community, or as an employee or volunteer of the Peace Corps.
For detailed information on selling your home, see Publication 523.