Georgie is a U.S. citizen who is employed by Hawk enterprises, a global company.

Question

Georgie is a U.S. citizen who is employed by Hawk enterprises, a global company. Beginning on June 1, 2013, George began working in london. He worked there until January 31, 2014, when he transferred to paris. He worked in Paris the remainder of 2014. His salary for the first five months of 2013 was $100,000 and it was earned in the United States. His salary for the remainder of 2013 was $175,000, and it was earned in London. George's 2014 salary from Hawk was $300,000, with part being earned in London and part being earned in Paris. What is George's gross income in 2013 and 2014? (Assume that the 2014 indexed amount is the same as the 2013 indexed amount).

Note: I am looking for the solution, not a copy paste job from a question or article similar to this. I will only award points for answer.

Explanation / Answer

The above answer is incorrect. Since George worked 330 days in a foreign country, he meets the requirement for the foreign earned income exclusion.

Indexed Amount = $97600*

214/365 days x $97,600 = $57,223

2013George must include $217,777 ($275,000 $57,223) in his gross income for 2013.

365/365 days x $97600 = $97600

2014 George must include $202,400 ($300,000 $97,600) in his 2014 gross income

.

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