Sale of Personal Property

Seller's Tax Home

Generally, gain or loss from the sale or other disposition of personal property is sourced according to the seller's tax home.

Personal property includes:

• Machinery and equipment
• Furniture
• Stocks and Bonds: If personal property is sold by a bona fide resident of a relevant possession such as Puerto Rico, the gain (or loss) from the sale is treated as sourced with that possession.

There are special rules for gains from disposition of certain investment property (for example, stocks, bonds, debt instruments, diamonds and gold) owned by a U.S. citizen or resident alien prior to becoming a bona fide resident of a possession. For more information see Publication 570.