CLIENT HAD FOREIGN INCOME DOESN'T QUALIFY FOR PHYSICAL OR BONAFIDE TEST

Forum|Forum|6 years ago
February 13, 2020
2 replies
31 views

Client is trying to minimize US taxation, but doesn't qualify both tests, been in that country for only 217 consecutives days, so if form 2555 doesn't help, where do I report the taxes he paid in the foreign country? How can I reduce the taxes for that foreign income?

ProSeries Professional

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Best answer by sjrcpa

File the 2019 return when he has hit 330 days in the foreign country. He'll get a prorated foreign income exclusion for 2019, provided he meets the other requirements (tax home?)

Accountant-Man

Level 13

Foreign taxes paid on income also taxed by the US goes on Form 1116.

** I'm still a champion... of the world! Even without The Lounge.

Accountant-Man

Level 13

Does he qualify for a partial exclusion? Will he qualify some time in 2020?

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test

** I'm still a champion... of the world! Even without The Lounge.

W

WALLSTREET3Author

Level 3

He is planning to stay a total of two years, so yes he will work 2020 in that country. He is a US legal Resident, so he's got a permit of two years to work abroad

sjrcpaAnswer

Level 15

File the 2019 return when he has hit 330 days in the foreign country. He'll get a prorated foreign income exclusion for 2019, provided he meets the other requirements (tax home?)

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