Rev. Rul. 54-105

Gains realized on the sale of items of property, which are the personal property of the taxpayer, such as personal automobiles or television sets, in a foreign country by a United States citizen living abroad are not exempt from Federal income tax under the provisions of section 116(a) of the Internal Revenue Code which relates to the exclusion of earned income from sources without the United States in the case of citizens who are residing abroad. Such gains are includible in gross income under the provisions of section 22(a) of the Code, and inasmuch as they result from the sale of capital assets are subject to the limitations provided in section 117(b) of the Code. For the purpose of determining the gain, the cost and selling price of the property should be expressed in American currency at the rate of exchange prevailing as of the date of the purchase and the date of the sale, respectively. Cf. Rev. Rul. 291, C.B. 1953-2, 42.