Hank is a U.S. citizen and is doing a three to six-year assignment as a sales executive in Paris for a French company, which began this year. Hank earned $109,500 working for the French company this year but only lived in France for 180 days (out of 365 days). He will live full-time in France next year. What amount of Hank's $109,500 salary this year will he be allowed to exclude from gross income in the U.S. (rounded to the nearest one-hundred dollars)?

Question

Quizplus · Accepted Answer

$103,900 × [180 ÷ 365] = $51,238.36  rounded to $51,200. Since Hank will have a tax home in a foreign country and spend more than 330 days in the foreign country over 12 months, he is eligible to exclude foreign earned income. The exclusion is computed on a daily basis, the maximum exclusion is reduced pro-rata for each day during the calendar year the taxpayer is not considered to be a resident of the foreign country or does not actually live in the foreign country.

Hank Is a U