IRS - profit on sale of home abroad w/ Sect 121 exclusion

Americans who have owned and sold real estate will probably understand this.

Anyway, if you sell your primary residence (subject to certain time rules) with a profit under 250K USD you qualify for the Section 121 exclusion which means no U.S. tax owed on the profit. I checked and this applies to your owned primary residence abroad as well.

So in this scenario you sell your primary residence typically a condo in Thailand with a profit under 250k USD but you know you're qualified for the Section 121 exclusion.

So do you need to report that sale to the IRS?

You would think yes, but I found yes only if a Form 1099-S has been generated.

But that US form usually done by title companies, mortgage companies, etc. would not be generated in Thailand.

So ipso facto, no need to report the sale to the IRS. Makes sense?

Interestingly years ago I made a big but still under 250K profit on my primary residence in the US so thinking it was complicated I went to HR Block. They didn't report it! I didn't know enough to ask why not.

(Yes, presumably you'd have a tax liability in Thailand on such as sale but this topic isn't about that.)

Edited April 27Apr 27 by Jingthing