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View Full Version : IRS pub. 54; Chapter 4- Requirements


cbetter
Jun 3, 2008, 11:05 AM
IRS Publication 54, Chapter 4, pg.11 states:

Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements.
1. Your tax home must be in a foreign country
2. You must have foreign earned income.
3. You must be either:
a. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
b. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
c. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.


To qualify for this exclusion, I'm a bit uncertain on a few things:
1. If you have a home in the U.S. that's in you & your spouse's name and only you are going to work in another country, must your name be removed from the deed? Would it still be considered your "tax home" if you still own the property in the U.S.
2. If you travel back to the U.S. to visit, while working in another country, do you need to be gone for 330 consecutive days to claim foreign earned income exclusion? Otherwise, does this mean that as long as you're in the foreign country for a toal of 330 days within 12 consecutive months? Must they be in the same calendar (tax) year (ie. Jan-Dec)?
3. Can you go and visit another country for a few days or do you have to stay in the foreign country where you're working?

MukatA
Jun 3, 2008, 05:32 PM
1. Dubai can not be your tax home if it does not have income tax.
2. It is not necessary that 330 days are in the same calender year.

AtlantaTaxExpert
Jun 12, 2008, 10:12 AM
MukatA:

On Item #1 of your answer, I disagree. "Tax Home" means that you are sbject to the tax structure of that specific country, even if the country has NO income tax.

Items #2 is correct.

Cbetter:

1) Negative; you do NOT have to have your name removed from the deed.

2 & 3) Out of a twelve consecutive month period, you must be located in the foreign country for 330 of those days, meaning you can be outside of the foreign country for up to 35 days.