Sara, a Cash-Basis, Calendar-Year Taxpayer, Worked Overseas for the Past

question 27

Multiple Choice

Sara, a cash-basis, calendar-year taxpayer, worked overseas for the past three years and is eligible for the foreign earned income exclusion for the income earned from January 1 through January 31, 2018 before she returned to the United States. She was paid $30,000 including bonuses for this month's work but she did not have to pay any foreign taxes on this income. The maximum foreign earned income exclusion for 2018 is $103,900. What is her foreign earned income exclusion for 2018?

• A) She has no exclusion, as she paid no foreign taxes.
• B) $8,824
• C) $30,000
• D) $103,900

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Definitions:

Shareholder Vote

The right of shareholders to vote on corporate matters, typically exercised at shareholders' meetings.

Forced Transaction

A sale or trade that occurs under pressure, often lacking the free will or consent of one of the parties involved.

Dissolution

The official closure of an entity, such as a corporation or partnership, with legal processes to disband and distribute assets.

Court Order

A formal instruction or command issued by a court, requiring a person or entity to do or refrain from doing something.