A USCitizen Worked in a Foreign Country for the Period July

question 85

Multiple Choice

A U.S.citizen worked in a foreign country for the period July 1,2014 through August 1,2015.Her salary was $10,000 per month.Also,in 2014 she received $5,000 in dividends from foreign corporations (not qualified dividends) .No dividends were received in 2015.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 2014 or 2015.
• B)The taxpayer can exclude a portion of the salary from U.S.gross income in 2014 and 2015,and all of the dividend income.
• C)The taxpayer can exclude from U.S.gross income $60,000 salary in 2014,but in 2015 the taxpayer will exceed the twelve month limitation and,therefore,all of the 2015 compensation must be included in gross income.All of the dividends must be included in 2014 gross income.
• D)The taxpayer must include the dividend income of $5,000 in 2014 gross income,but the taxpayer can exclude a portion of the compensation income from U.S.gross income in 2014 and 2015.
• E)None of these.

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Definitions:

Spring

A natural source of water emerging from the ground, often fed by an underground aquifer.

Perched Lake

A body of water situated above the normal water table, created by local, impermeable layers of rock or sediment.

Inflow

The process of water or other fluids moving into a particular area or system, contributing to the volume contained within.

Evaporation

The process by which water is converted from its liquid form to vapor, typically under the influence of sun and heat.