A US Citizen Worked in a Foreign Country for the Period

question 44

Multiple Choice

A U.S. citizen worked in a foreign country for the period July 1, 2016 through August 1, 2017. Her salary was $10,000 per month. Also, in 2016 she received $5,000 in dividends from foreign corporations (not qualified dividends) . No dividends were received in 2017. 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 2016 or 2017.
• B)The taxpayer can exclude a portion of the salary from U.S. gross income in 2016 and 2017, and all of the dividend income.
• C)The taxpayer can exclude from U.S. gross income $60,000 salary in 2016, but in 2017 the taxpayer will exceed the twelve month limitation and, therefore, all of the 2017 compensation must be included in gross income. All of the dividends must be included in 2016 gross income.
• D)The taxpayer must include the dividend income of $5,000 in 2016 gross income, but the taxpayer can exclude a portion of the compensation income from U.S. gross income in 2016 and 2017.
• E)None of these.

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Definitions:

New Employment

The process of beginning work in a new position or with a new company, involving adaptation to new roles, responsibilities, and organizational culture.

Human Resources

The department within an organization that focuses on recruitment, management, and guidance for the people who work in the organization.

Downsizing

The process of reducing the number of employees within an organization for economic or strategic reasons.

Restructuring

The corporate action of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized for its present needs.