CITIZENS WORKING ABROAD (T/G 105) covers the preparatory details and qualifying requirements (physical presence or bona fide residence) for the $80,000 foreign earned-income exclusion (separately, for each employed spouse), and the foreign housing-cost exclusion when working overseas for a year or more. Also covered:

• Exactness of "24-hour days"
• Section 911 travel diary
• Attributions to "performance year"
• Mastering Forms 2555/2555-EZ
• Foreign accounts & investments
• Residency when returning to U.S.

Citizens Working Abroad
Book: 105
Table of Content

1.  THE $70,000/$80,000 EXCLUSION               1-1
    
    Must Be U.S. “Individual”                   1-2
    Taxed on Worldwide Income                   1-3
    Include In; Exclude Out                     1-5
    Foreign Situs Tax Home                      1-6
    Section 911(a): Introduction                1-8
    Election Made on Form 2555                  1-10
    “Qualified Individual” Defined              1-12
    Statutory Wording Re $70,000/$80,000        1-14
    IRS Jurisdiction: Philadelphia              1-16    
    
2.  FOREIGN EARNED INCOME                       2-1
    
    The Statutory Definition                    2-2
    “Earned Income” Redefined                   2-4
    Engaged in Trade or Business                2-5
    Employer-Provided Facilities                2-7
    Overseas “Differential” Allowances          2-8
    Excludable Meals & Lodging                  2-10
    Must Discount “U.S. Days”                   2-12
    Attribution Rule Explained (?)              2-12
    Form 2555, Part IV: Overview                2-16
    Summary Itemization on Part IV              2-18

3.  HOUSING COST EXCLUSION                      3-1

    The Statutory Provision                     3-2
    Housing Cost Amount “Explained”             3-3
    Importance of Regulation 1.911-4            3-5
    Qualified Housing Expenses                  3-6
    Second Foreign Household                    3-7
    Base Housing Amount                         3-9
    Limitation on Housing Exclusion             3-10
    Part VI, Form 2555 Overview                 3-12
    Self-Employeds: Special Rule                3-13

4   PHYSICAL PRESENCE TEST                      4-1

    At Least 330 “Full Days”                    4-2
    The 330 Days: Nonconsecutive                4-4
    The Regulatory Wording                      4-5
    Examples of Loss Days                       4-6
    Maintain a Travel Diary                     4-8
    When to Figure the 12 Months                4-10
    A More Comprehensive Example                4-12
    Your Attribution Percentages                4-14
    Waiver for Civil Unrest                     4-16
    No waiver for U.S. Days                     4-17

5.  BONA FIDE RESIDENCE TEST                    5-1

    An Entire Tax Year                          5-2
    Meaning of “Uninterrupted”                  5-3
    Watch Your Ps and Qs                        5-5
    Paying Foreign Taxes: The Key               5-6
    Worth Paying Foreign Taxes?                 5-8
    Satisfying the IRS                          5-10
    Contractual Terms of Employment             5-12
    Presence in U.S. on Business                5-13
    Income Earned in U.S. on Business           5-14

6.  PREPARATORY MATTERS                         6-1

    Make Exploratory Business Trip              6-2
    Collect Foreign Contact Names, Etc.         6-4
    Sanitize Employment Contract                6-5
    Vital Matters Updating                      6-6
    Renting Your U.S. Home?                     6-9
    Selling Your U.S. Home?                     6-11
    Sale of Residence Form 2119                 6-13
    Take Tax Records With You                   6-14
    Form 2350: Extension to File                6-15
    Another Important Form: 673                 6-18
    Change of Address Form(s)                   6-19

7.  MOVING EXPENSES                             7-1
    
    General Moving Expense Rule                 7-2
    Clarify Reimbursement Source                7-3
    Get a Written Statement                     7-4
    The 120-Day “When” Rule                     7-6
    Moving Back to the U.S.                     7-8
    Forms 3903 and 3903-F                       7-8
    Reimbursement Entry Confusion               7-10
    The General Idea                            7-12
    Tie-In With Form 2555                       7-14
    Exclusion Allocation Fraction               7-15

8.  MASTERING FORM 2555                         8-1

    Husband and Wife                            8-2
    Clearly identify Each Form                  8-3
    Part I: General Information                 8-5
    Country of Citizenship                      8-6
    Parts II, III, & IV: Form 2555              8-8
    Housing Exclusion Comparisons               8-12
    Income Exclusion Comparisons                8-14
    Adjustment for “Double Benefits”            8-15
    Part IX for Self-Employeds                  8-17
    Is Form 2555-EZ for You?                    8-19
    Synopsis of Form 2555-EZ                    8-20

9.  U.S. POSSESSIONS, ETC.                      9-1
    
    The “Long Arm” of IRS                       9-2
    Guam, American Samoa, & the CNMI            9-4
    Section 931: Specified Possessions          9-5
    American Samoa Form 4563                    9-7
    Form 5074: Guam & CNMI                      9-8
    Virgin Islands: Tax Haven?                  9-10
    Puerto Rico: Statehood “No”                 9-11
    Puerto Rico: “Exempt From”                  9-13
    The “Etc.” Possessions                      9-14

10. FOREIGN ACCOUNTS & TRUSTS                   10-1

    Two Foreign Accounts Questions              10-2
    Form TD F 90-22.1 Overview                  10-4
    Form 3520 Overview                          10-5
    Form 3520-A: A “Conduit” Return             10-6
    Small Business Entities                     10-9
    Report on Form 926                          10-11
    Foreign Sales Corporations                  10-12
    Global Mutual Funds                         10-14
    Beware of Tax Havens                        10-15

11. FOREIGN TAX CREDIT                          11-1
        
    Overview of Form 1116                       11-2
    Deduction Alternatively Allowed             11-3
    “Slicing the Pie” Mandate                   11-5
    Income Categories on Form 1116              11-6
    Excluded Income is Excluded                 11-8
    Part II: Foreign Taxes Paid                 11-10
    Part III: Overview                          11-11
    Available Credit “Adjusted”                 11-12
    Your Credit Limitation Fraction             11-13
    Now, “The Smaller Of”                       11-14
    Part IV: Summary of Credits                 11-16
    
12. RETURNING TO THE U.S.                       12-1

    The U.S. Job Market                         12-2
    Other Preparatory Efforts                   12-3
    Establish U.S. Address Promptly             12-6
    State Residency Principles                  12-7    
    State “Sourcing” Principles                 12-8
    Example California Treatment                12-10
    The 9 Nontaxing States                      12-12
    Reexamine Foreign Residency Tax             12-14
    Reexamine Foreign Investment Sources        12-15
    Settle Up With the IRS                      12-17