Can FEIE- Physical Presence Test be prorated?

Forum|Forum|6 years ago
December 6, 2019
1 reply
17 views

This is my client's question: I'm currently in Iraq, I would meet the 330 days out of the country but needed to go back to the states to defend myself in court. The court adjourned twice, before awarding in my favor. However; it took 7 weeks. The only reason for returning to the states was the court case.

I left for Iraq December 20th, 2017 and I'm scheduled to return to the US November 30th.

Would the prorated portion work?

An Expat Tax Pro said it could be, I don't agree as the test isn't met. What am I missing?

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Best answer by itonewbie

"I would meet the 330 days out of the country but needed to go back to the states to defend myself in court"

I saw your question also in the PTO FB group. My first question is whether you have qualified that statement. 330-day count (which btw, is based on any 12-month period instead of calendar year as your question seems to imply) is not the only criterion for §911. You need to review his underlying contract (e.g. long term assignment/employment, military contractors, rotational schedules, etc.) and other relevant facts and circumstances to establish not only his tax home but also his abode (which has been a point of contention in recent cases).

Unless the year in question is your client's first year overseas or he's a green card holder, assuming all the other conditions for §911 are met, you should use BFR instead.

[Edited: Your question was posted on the FB group instead of NAEA webboard]

itonewbieAnswer

Level 15

"I would meet the 330 days out of the country but needed to go back to the states to defend myself in court"

I saw your question also in the PTO FB group. My first question is whether you have qualified that statement. 330-day count (which btw, is based on any 12-month period instead of calendar year as your question seems to imply) is not the only criterion for §911. You need to review his underlying contract (e.g. long term assignment/employment, military contractors, rotational schedules, etc.) and other relevant facts and circumstances to establish not only his tax home but also his abode (which has been a point of contention in recent cases).

Unless the year in question is your client's first year overseas or he's a green card holder, assuming all the other conditions for §911 are met, you should use BFR instead.

[Edited: Your question was posted on the FB group instead of NAEA webboard]

---------------------------------------------------------------------------------Still an AllStar

T

TaxGuyBill

Level 15

The client said "I left for Iraq December 20th, 2017 and I'm scheduled to return to the US November 30th."

To me, the indicates the client was only out of the US for a total of less than one year (minus the 7 weeks) it is unlikely the client qualifies for the Bona Fide Resident either.

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