David, an Employee of Lima Corporation, Is a U

question 53

Multiple Choice

David, an employee of Lima Corporation, is a U.S. citizen and the regional sales manager for South America. His office is in Miami and he spends nine months each year on business in South America. Which of the following statements about the treatment of his income from Lima Corporation is correct?

• A) He must include his Lima income in his gross income and is not allowed a tax credit for any South American taxes paid.
• B) He has the option of either excluding $99,200 of his Lima income or taking a tax credit for the South American taxes paid.
• C) Because he is in South America only nine months of the year, he is only allowed to exclude $74,400 of Lima income.
• D) Because he is in South America only nine months of the year, he is not allowed to exclude any of his Lima income, but he can take a tax credit for any South American taxes paid.

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Definitions:

Lymph Nodes

Small, bean-shaped structures that are part of the lymphatic system, helping the body fight infections and other diseases.

Innate Physical Barrier

Natural barriers formed by the body’s anatomy, such as the skin and mucosal surfaces, that help prevent the entry of pathogens.

Washing Action

The process of cleansing or removing dirt, contaminants, or impurities from objects or surfaces, typically involving agitation and detergents or solvents.

Tears

A liquid produced by the lacrimal glands for lubrication, nourishment of the cornea, and protection against infection in the eye.