U.S. citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign- earned income exclusion for 60 days in 2016; 365 days in 2017; and 60 days in 2018. The maximum earned income exclusion for 2018 rounded to the nearest whole number is?

Question

Quizplus · Accepted Answer

To calculate the maximum earned income exclusion for 2018, we need to add up the number of days that the individual qualifies for the foreign-earned income exclusion in 2018 and divide it by 365. In this case, the individual qualifies for the exclusion for 60 days in 2018, so the calculation would be:

60/365 = 0.1644

Then, we need to multiply this fraction by the maximum exclusion amount for 2018, which is $104,100. This gives us:

0.1644 x $104,100 = $17,113.64

Rounding this to the nearest whole number gives us the answer of $17,113, which corresponds to choice C).

US Citizen Who Has a Calendar Tax Year Establishes a Tax