Louise works in a foreign branch of her employer's business. She earned $5,000 per month throughout...

Louise works in a foreign branch of her employer's business. She earned $5,000 per month throughout the relevant period. Which of the following is correct?

a.If Louise worked in the foreign branch from May 1, 2019 until October 31, 2020, she may exclude $40,000 from gross income in 2019 and exclude $50,000 in 2020.

b.If Louise began work in the foreign country on May 1, 2019, she must work through November 30, 2020 in order to exclude $55,000 from gross income in 2020 but none in 2019.

c.If Louise worked in the foreign branch from May 1, 2019 until October 31, 2020, she cannot exclude anything from gross income because she was not present in the country for 330 days in either year.

d.Louise will not be allowed to exclude any foreign earned income because she made less than $107,600.

Expert Solution

Ans: .If Louise worked in the foreign branch from May 1, 2019 until October 31, 2020, she may exclude $40,000 from gross income in 2019 and exclude $50,000 in 2020. (option a) is the answer.

Lousie can deduct $40,000 from gross income in 2019 and exclude $50,000 in 2020 if she worked over there from May 1,2019 until October 31, 2020 as per prevelant tax laws. Hence, option a is the correct choice.

Lousie does not have to work unitl November 30, in order to avail exclusions. Hence, option b is incorrect.

Since, Lousie is allowed to deduct amounts from her gross income, option c and d are also incorrect.

ekkarill92 answered 2 years ago

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