Reporting Foreign Unincorporated Business Income
I have been attempting to figure out the proper filing for a lawful US resident that has made a tax home in a foreign country (passing the bona fide residence test), and derives all income from a sole proprietorship business.
The return itself is considerably past due so there is no expectation to receive any income exclusion credits.
The problem I'm having is understanding the reporting requirements for the business. Is a schedule C required to accompany the 1040 or is the 2555 sufficient?
Also in reading the instructions for 2555, I am under the impression that in addition to the net profits of the business, an amount equal but not more than 30% of the net profits adjusted for the 1/2 SE tax deduction is to be added. Hence compensation would =
NET PROFIT + ((NET PROFIT*30%)-(50% SE TAX)). Is this correct?