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You can exclude up to $250,000 of the gain on the sale of your main home if you meet the ownership and use test.
Also, to claim the exclusion during the two-year period ending on the date of the sale, you must not have excluded gain from the sale of another home.
To pass the ownership and use test means that during the five-year period ending on the date of the sale, you have to meet two main criteria.
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The law does not differentiate whether the home is in a foreign country. It also does not consider whether you were a resident of this country during the period of ownership and use. For example, if a U.S. citizen resided in Paris for two of the last five years, that home could be considered his or her personal residence and qualify for gain exclusion. Accordingly, so long as within two of the last five years ending on the date of the sale, you used and owned the foreign-country home as your principal residence, you will not owe tax on the $100,000 gain.
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