Louise works in a foreign branch of her employer's business.She earned $5,000 per month throughout the relevant period.Which of the following is correct?

Question

Quizplus · Accepted Answer

If Louise met the physical presence test or bona fide residence test, she may exclude foreign earned income up to a certain amount. The relevant period is from May 1, 2018, to October 31, 2019, which covers parts of both 2018 and 2019 tax years. Assuming Louise met the physical presence test or bona fide residence test, she may exclude up to $105,900 of foreign earned income for the 2018 tax year and up to $105,900 for the 2019 tax year. Since she earned $5,000 per month throughout the relevant period, she may exclude $40,000 from gross income in 2018 (8 months x $5,000) and $50,000 in 2019 (10 months x $5,000). Therefore, choice A is correct. The other choices are incorrect for various reasons stated in their explanations.

Louise Works in a Foreign Branch of Her Employer's Business