A US Citizen Worked in a Foreign Country for the Period

question 4

Multiple Choice

A U.S. citizen worked in a foreign country for the period July 1, 2017 through August 1, 2018. Her salary was $10,000 per month. Also, in 2017 she received $5,000 in dividends from foreign corporations (not qualified dividends) . No dividends were received in 2018. Which of the following is correct?

• A) The taxpayer cannot exclude any of the income because she was not present in the foreign country more than 330 days in either 2017 or 2018.
• B) The taxpayer can exclude a portion of the salary from U.S. gross income in 2017 and 2018, and all of the dividend income.
• C) The taxpayer can exclude from U.S. gross income $60,000 salary in 2017, but in 2018 the taxpayer will exceed the twelve month limitation and, therefore, all of the 2018 compensation must be included in gross income. All of the dividends must be included in 2017 gross income.
• D) The taxpayer must include the dividend income of $5,000 in 2017 gross income, but the taxpayer can exclude a portion of the compensation income from U.S. gross income in 2017 and 2018.
• E) None of these.

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Definitions:

Constraints

Limitations or restrictions that affect the planning, process, or outcome of an activity or system.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision or choosing between options.

Decision Criterion

The rules or standards used to choose among alternatives in decision-making processes.

Timeliness

The characteristic of occurring at a suitable or opportune time, particularly relevant in the context of information delivery and project completion.