A U.S. citizen worked in a foreign country for the period July 1, 2016 through August 1, 2017. Her salary was $10,000 per month. Also, in 2016 she received $5,000 in dividends from foreign corporations (not qualified dividends) . No dividends were received in 2017. Which of the following is correct?
A) The taxpayer cannot exclude any of the income because she was not present in the foreign country more than 330 days in either 2016 or 2017.
B) The taxpayer can exclude a portion of the salary from U.S. gross income in 2016 and 2017, and all of the dividend income.
C) The taxpayer can exclude from U.S. gross income $60,000 salary in 2016, but in 2017 the taxpayer will exceed the twelve month limitation and, therefore, all of the 2017 compensation must be included in gross income. All of the dividends must be included in 2016 gross income.
D) The taxpayer must include the dividend income of $5,000 in 2016 gross income, but the taxpayer can exclude a portion of the compensation income from U.S. gross income in 2016 and 2017.
E) None of these.
Correct Answer:
Verified
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