Fred currently earns $9,000 per month. fred has been offered the chance to transfer for three to five years to an overseas affiliate. his employer is willing to pay fred $10,000 per month if he accepts the assignment. assume that the maximum foreign earned income exclusion for next year is $100,800

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19 November, 06:32

Fred currently earns $9,000 per month. fred has been offered the chance to transfer for three to five years to an overseas affiliate. his employer is willing to pay fred $10,000 per month if he accepts the assignment. assume that the maximum foreign earned income exclusion for next year is $100,800

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Darryl Vaughn · Answer 1

The answer is Fred will acquire $120,000 by traveling to another country, yet he can avoid $101,300 under the remote earned wage prohibition.

Explanation:

Fred will acquire $120,000 by traveling to another country, yet he can avoid $101,300 under the remote earned wage prohibition. Subsequently, Fred will report net wage of $18,700 from the compensation earned. Since Fred meets the prerequisites for the outside earned pay prohibition, he may likewise bar the business gave lodging costs that surpass $16,208 (16% x $101,300), up to a greatest rejection of $14,182 (14% x $101,300). In this way, Fred may bar $3792 (the lesser of (a) ($20,000 lodging cost less $16,208 = $3792) or (b) $14,182). In this way, Fred incorporates $16,208 ($20,000 - $3792 rejection) of the business gave lodging in gross salary.