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Citizens Working Abroad (105)
Author: Holmes F. Crouch
Pages: 224
List Price: $19.95
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  • Summary

    CITIZENS WORKING ABROAD (T/G 105) covers the preparatory details and qualifying requirements (physical presence or bona fide residence) for the $80,000 foreign earned-income exclusion (separately, for each employed spouse), and the foreign housing-cost exclusion when working overseas for a year or more. Also covered:

    • Exactness of "24-hour days"
    • Section 911 travel diary
    • Attributions to "performance year"
    • Mastering Forms 2555/2555-EZ
    • Foreign accounts & investments
    • Residency when returning to U.S.

    Table of Contents
    Citizens Working Abroad
    Book: 105
    Table of Content
    
    1.  THE $70,000/$80,000 EXCLUSION               1-1
        
        Must Be U.S. “Individual”                   1-2
        Taxed on Worldwide Income                   1-3
        Include In; Exclude Out                     1-5
        Foreign Situs Tax Home                      1-6
        Section 911(a): Introduction                1-8
        Election Made on Form 2555                  1-10
        “Qualified Individual” Defined              1-12
        Statutory Wording Re $70,000/$80,000        1-14
        IRS Jurisdiction: Philadelphia              1-16    
        
    2.  FOREIGN EARNED INCOME                       2-1
        
        The Statutory Definition                    2-2
        “Earned Income” Redefined                   2-4
        Engaged in Trade or Business                2-5
        Employer-Provided Facilities                2-7
        Overseas “Differential” Allowances          2-8
        Excludable Meals & Lodging                  2-10
        Must Discount “U.S. Days”                   2-12
        Attribution Rule Explained (?)              2-12
        Form 2555, Part IV: Overview                2-16
        Summary Itemization on Part IV              2-18
    
    3.  HOUSING COST EXCLUSION                      3-1
    
        The Statutory Provision                     3-2
        Housing Cost Amount “Explained”             3-3
        Importance of Regulation 1.911-4            3-5
        Qualified Housing Expenses                  3-6
        Second Foreign Household                    3-7
        Base Housing Amount                         3-9
        Limitation on Housing Exclusion             3-10
        Part VI, Form 2555 Overview                 3-12
        Self-Employeds: Special Rule                3-13
    
    4   PHYSICAL PRESENCE TEST                      4-1
    
        At Least 330 “Full Days”                    4-2
        The 330 Days: Nonconsecutive                4-4
        The Regulatory Wording                      4-5
        Examples of Loss Days                       4-6
        Maintain a Travel Diary                     4-8
        When to Figure the 12 Months                4-10
        A More Comprehensive Example                4-12
        Your Attribution Percentages                4-14
        Waiver for Civil Unrest                     4-16
        No waiver for U.S. Days                     4-17
    
    5.  BONA FIDE RESIDENCE TEST                    5-1
    
        An Entire Tax Year                          5-2
        Meaning of “Uninterrupted”                  5-3
        Watch Your Ps and Qs                        5-5
        Paying Foreign Taxes: The Key               5-6
        Worth Paying Foreign Taxes?                 5-8
        Satisfying the IRS                          5-10
        Contractual Terms of Employment             5-12
        Presence in U.S. on Business                5-13
        Income Earned in U.S. on Business           5-14
    
    6.  PREPARATORY MATTERS                         6-1
    
        Make Exploratory Business Trip              6-2
        Collect Foreign Contact Names, Etc.         6-4
        Sanitize Employment Contract                6-5
        Vital Matters Updating                      6-6
        Renting Your U.S. Home?                     6-9
        Selling Your U.S. Home?                     6-11
        Sale of Residence Form 2119                 6-13
        Take Tax Records With You                   6-14
        Form 2350: Extension to File                6-15
        Another Important Form: 673                 6-18
        Change of Address Form(s)                   6-19
    
    7.  MOVING EXPENSES                             7-1
        
        General Moving Expense Rule                 7-2
        Clarify Reimbursement Source                7-3
        Get a Written Statement                     7-4
        The 120-Day “When” Rule                     7-6
        Moving Back to the U.S.                     7-8
        Forms 3903 and 3903-F                       7-8
        Reimbursement Entry Confusion               7-10
        The General Idea                            7-12
        Tie-In With Form 2555                       7-14
        Exclusion Allocation Fraction               7-15
    
    8.  MASTERING FORM 2555                         8-1
    
        Husband and Wife                            8-2
        Clearly identify Each Form                  8-3
        Part I: General Information                 8-5
        Country of Citizenship                      8-6
        Parts II, III, & IV: Form 2555              8-8
        Housing Exclusion Comparisons               8-12
        Income Exclusion Comparisons                8-14
        Adjustment for “Double Benefits”            8-15
        Part IX for Self-Employeds                  8-17
        Is Form 2555-EZ for You?                    8-19
        Synopsis of Form 2555-EZ                    8-20
    
    9.  U.S. POSSESSIONS, ETC.                      9-1
        
        The “Long Arm” of IRS                       9-2
        Guam, American Samoa, & the CNMI            9-4
        Section 931: Specified Possessions          9-5
        American Samoa Form 4563                    9-7
        Form 5074: Guam & CNMI                      9-8
        Virgin Islands: Tax Haven?                  9-10
        Puerto Rico: Statehood “No”                 9-11
        Puerto Rico: “Exempt From”                  9-13
        The “Etc.” Possessions                      9-14
    
    10. FOREIGN ACCOUNTS & TRUSTS                   10-1
    
        Two Foreign Accounts Questions              10-2
        Form TD F 90-22.1 Overview                  10-4
        Form 3520 Overview                          10-5
        Form 3520-A: A “Conduit” Return             10-6
        Small Business Entities                     10-9
        Report on Form 926                          10-11
        Foreign Sales Corporations                  10-12
        Global Mutual Funds                         10-14
        Beware of Tax Havens                        10-15
    
    11. FOREIGN TAX CREDIT                          11-1
            
        Overview of Form 1116                       11-2
        Deduction Alternatively Allowed             11-3
        “Slicing the Pie” Mandate                   11-5
        Income Categories on Form 1116              11-6
        Excluded Income is Excluded                 11-8
        Part II: Foreign Taxes Paid                 11-10
        Part III: Overview                          11-11
        Available Credit “Adjusted”                 11-12
        Your Credit Limitation Fraction             11-13
        Now, “The Smaller Of”                       11-14
        Part IV: Summary of Credits                 11-16
        
    12. RETURNING TO THE U.S.                       12-1
    
        The U.S. Job Market                         12-2
        Other Preparatory Efforts                   12-3
        Establish U.S. Address Promptly             12-6
        State Residency Principles                  12-7    
        State “Sourcing” Principles                 12-8
        Example California Treatment                12-10
        The 9 Nontaxing States                      12-12
        Reexamine Foreign Residency Tax             12-14
        Reexamine Foreign Investment Sources        12-15
        Settle Up With the IRS                      12-17

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