My husband and I sold our house in Germany and moved to the US. We had to pay taxes on the sale in Germany. Do we have to pay taxes in the US? I am a US Citizen but my husband is German.

In general, as a U.S. citizen you are taxed on your worldwide income. Gains recognized on foreign sales must be included on your U.S. tax return. However, if you lived in the home as your principal residence for 2 of the last 5 years, then you can exclude up to $250,000 of gain on the sale. If you file a joint tax return with your husband for 2008, he can also exclude up to $250,000 of gain.

Yes, you must report sale on schedule D. You may be able to exclude the gain as explained by IntlTax. Read Read: Your U.S. Tax Return: Profit From the Sale of Your Home (http://taxipay.blogspot.com/2008/03/profit-from-sale-of-your-home.html)

If you are unable to exclude the gain, then you will file Form 1116 to get foreign tax credit. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income (http://taxipay.blogspot.com/2008/03/us-citizen-or-resident-with-foreign.html)

United States Treasury Regulation 31 CFR 103 require that every United States person file this form TD F 90-22.1 if at any time during the year, you have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account and the total amount at any time in the year was $10,000 or more. Mandatory Reporting of Foreign Bank and Financial Accounts (FBAR) (http://mytaxes.in/index.php?topic=1.0)