Illustrated Example of Form 4563

John Black is a U.S. citizen and was a bona fide resident of American Samoa during all of 2000. He has to file Form 1040 because his gross income from sources outside the possessions ($8,000 of dividends from U.S. corporations) is at least the total of his personal exemption and allowable standard deduction for single filers. (See Filing Tax Returns, earlier.) Because he has to file Form 1040, he fills out Form 4563 to determine the amount of possession income he can exclude.

Line 1. John enters the date his bona fide residence began in American Samoa, June 2, 1999. Because he is still a bona fide resident, he writes "not ended" in the second blank space.

Line 2. He checks the box labeled "Rented house or apartment" to describe his type of living quarters in American Samoa.

Lines 3a and 3b. He checks "No" on line 3a because no family members lived with him. He leaves line 3b blank.

Lines 4a and 4b. He checks "No" on line 4a because he did not maintain a home outside American Samoa. He leaves line 4b blank.

Line 5. He enters the name and address of his employer, Samoa Products Co. It is a private Samoan corporation.

Line 6. He enters the dates of his 2-week vacation to New Zealand from November 11 to November 25. That was his only trip outside American Samoa during the year.

Line 7. He enters the $24,000 in wages he received from Samoa Products Co.

Line 9. He received dividends of $100 from a CNMI corporation and $220 from a Samoan corporation. He enters the total of those amounts. He does not enter his dividends from U.S. corporations because they do not qualify for the possession exclusion.

Line 15. John totals the amounts on lines 7 and 9 to get the amount he can exclude from his gross income in 2000.

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