Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

foreign exclusion

Highlighted
Level 2

client has established residence in Ukraine and wants to use the foreign income exclusion to not pay US taxes

I may be wrong but I believe that exclusion is for US citizens earnings from abroad

US income is taxed

Please respond

Thank you

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 10

No, the foreign tax credit is for US taxpayers who are taxed on the same income by another country.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings (from work, not from investments or other sources) from income up to an amount that is adjusted annually for inflation ($103,900 for 2018, $105,900 for 2019, and $107,600 for 2020).

View solution in original post

2 Replies 2
Highlighted
Level 15

1. Is your client a US Citizen?

2. Is the income from outside the US?

There are two possible criteria to exclude foreign income "bona fide resident" is one of them. The other is physical presence. 

Something like this might be helpful and you get come CPE for only $10 (or wait until next month and get it free) https://www.cpaacademy.org/self_study_show/a0D2S00000jUR7IUAW

 

Income tax returns are the most imaginative fiction being written today. — Herman Wouk
Highlighted
Level 10

No, the foreign tax credit is for US taxpayers who are taxed on the same income by another country.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings (from work, not from investments or other sources) from income up to an amount that is adjusted annually for inflation ($103,900 for 2018, $105,900 for 2019, and $107,600 for 2020).

View solution in original post