My daughter worked in the US for the first six months and in the UK for the last 5 months of 2006. Roughly calculating her taxes she would get a sizeable refund if she only declared her US income and a much smaller refund if she declared all income and filed Form 1116. Must she declare ALL foreign income and if so, can she use the currency rate of 12/31/06 to covert the UK figures?

Is she a US citizen? If so she must include her worldwide income. Is she going to continue being over in the UK for a while yet? There are things she could review regarding getting the best tax result depending on her situation.

Thank you for replying. Yes, she is a US citizen. She will be working in the UK until June when her visa runs out then travelling around for the rest of the year, probably not generating much income anywhere.

Yes as a citizen then she needs to include worldwide income. She now needs to look at the foreign tax credit or foreign earned income exclusion (which she will become eligible for if she remains abroad for sufficiently long). These things call all be found in Pub 519.

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