Fred currently earns $9,600 per month. Fred has been offered thechance to transfer for three to five years to an overseasaffiliate. His employer is willing to pay Fred $10,600 per month ifhe accepts the assignment. Assume that the maximum foreign-earnedincome exclusion for next year is $104,100.
a. If Fred’s employer also provides him free housing abroad(cost of $20,600), how much of the $20,600 is excludable fromFred’s income?
b. Suppose that Fred's employer has offered Fred a six-monthoverseas assignment beginning on January 1 of next year. How muchU.S. gross income will Fred report next year if he accepts thesix-month assignment abroad and returns home on July 1 of nextyear?
c. Suppose that Fred’s employer offers Fred a permanent overseasassignment beginning on March 1 of next year. How much U.S. grossincome will Fred report next year if he accepts the permanentassignment abroad? Assume that Fred will be abroad for 305 days outof 365 days next year.
d. If Fred’s employer also provides him free housing abroad(cost of $16,300 next year), how much of the $16,300 is excludablefrom Fred’s income? Assume that Fred will be abroad for 305 daysout of 365 days next year.
