Question

Fred currently earns $10,800 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $11,800 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $107,600. a-2. If Fred’s employer also provides him free housing abroad (cost of $21,800), how much of the $21,800 is excludable from Fred’s income?

Answer #1

**Sollution:-1)**

Income reported | $34,000 |

Explanation:

Fred will earn $1,41,600($11,800 per month*12) by going abroad, but he can exclude $1,07,600 under the foreign earned income exclusion.

Hence, Fred will report gross income of $34,000 ($1,41,600 - $1,07,600) from the salary earned.

**Sollution:-2)**

Amount to be excluded | $4,584 |

Explanation:

Since Fred meets the requirements for the foreign-earned income exclusion, he may also exclude the employer-provided housing costs that exceed

= $17,216(16% * $1,07,600) Or

Up to a maximum exclusion of

= $15,064(14% * $1,07,600)

Thus, Fred may exclude $4,584

Whichever is lower of (a) ($21,800 - $17,213 = $4,584)

OR

(b)( $15,064).

Thus, Fred includes $17,216 ($21,800 - $4,584 exclusion) of the employer-provided housing in gross income.

and exclusion = $4,584

Fred currently earns $10,800 per month. Fred has been offered
the chance to transfer for three to five years to an overseas
affiliate. His employer is willing to pay Fred $11,800 per month if
he accepts the assignment. Assume that the maximum foreign-earned
income exclusion for next year is $107,600. c-2. If Fred’s employer
also provides him free housing abroad (cost of $16,900 next year),
how much of the $16,900 is excludable from Fred’s income? Assume
that Fred will be...

Fred currently earns $9,000 per month. Fred has been offered the
chance to transfer for three to five years to an overseas
affiliate. His employer is willing to pay Fred $10,000 per month if
he accepts the assignment. Assume that the maximum foreign earned
income exclusion for next year is $100,800.
1.
How much U.S. gross income will Fred report if he accepts the
assignment abroad on January 1 of next year and works overseas for
the entire year?
2....

Required information
[The following information applies to the questions
displayed below.]
Fred currently earns $9,800 per month. Fred has been offered the
chance to transfer for three to five years to an overseas
affiliate. His employer is willing to pay Fred $10,800 per month if
he accepts the assignment. Assume that the maximum foreign-earned
income exclusion for next year is $105,900. (Do not round
intermediate calculations. Round your final answer to the nearest
whole dollar amount.)
c-1. Suppose that Fred’s...

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