Level 15

1) Based on the limited facts you provided, your client does not qualify for FEIE.  The income should not be reported on F.2555.

2) You did not answer my questions about the structure of his business.  This is a pertinent question in relation to FTC.  Factors such as where the entity is located and how contracts are concluded are important for international taxation.  Income related only to the days he performed services overseas, that portion of the income is foreign source and could be eligible for FTC.  However, FTC, inter alia, can only be claim on foreign taxes that are compulsory.  For short period of presence, especially in Europe where the US has extensive treaty coverage, it calls into question which are the countries he paid taxes to and whether these are taxes that must be paid (in light of domestic tax law and DTA).

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