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 340 days (out of 365 days). 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

$101,300 × [340/365] = $94,361.64 rounded to $94,400. 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