Fred currently earns $9,400 per month. Fred has been offered thechance to transfer for three to five years to an overseasaffiliate. His employer is willing to pay Fred $10,400 per month ifhe accepts the assignment. Assume that the maximum foreign-earnedincome exclusion for next year is $104,100.

a-1. How much U.S. gross income will Fredreport if he accepts the assignment abroad on January 1 of nextyear and works overseas for the entire year?

a-2. If Fred’s employer also provides him freehousing abroad (cost of $20,400), how much of the $20,400 isexcludable from Fred’s income?

b. Suppose that Fred's employer has offeredFred a six-month overseas assignment beginning on January 1 of nextyear. How much U.S. gross income will Fred report next year if heaccepts the six-month assignment abroad and returns home on July 1of next year?

c-1. Suppose that Fred’s employer offers Fred apermanent overseas assignment beginning on March 1 of next year.How much U.S. gross income will Fred report next year if he acceptsthe permanent assignment abroad? Assume that Fred will be abroadfor 305 days out of 365 days next year.

c-2. If Fred’s employer also provides him freehousing abroad (cost of $16,200 next year), how much of the $16,200is excludable from Fred’s income? Assume that Fred will be abroadfor 305 days out of 365 days next year.