Fred currently earns $11,500 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $13,250 per month if he accepts the assignment. Assume that the maximum foreign earned income exclusion for next year is $101,300. (Use 365 days in a year. Round your intermediate and final answer to the nearest whole dollar amount.)
a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? Income Reported ______
a-2. If Fred’s employer also provides him free housing (cost of $16,400), how much of the $16,400 is excludible from Fred’s income? Amount to be exluded?
b. Suppose that Fred’s employer has only offered Fred a six-month overseas assignment beginning on January 1 of next year. How much U.S. gross income will Fred report next year if he accepts the six-month assignment abroad and returns home on July 1 of next year? Income Reported ______
c-1. Suppose that Fred’s employer offers Fred a permanent overseas assignment beginning on March 1 of next year. How much U.S. gross income will Fred report next year if he accepts the permanent assignment abroad? Assume that Fred will be abroad for 305 days out of 365 days next year. Income Reported _______
c-2. If Fred’s employer also provides him free housing (cost of $15,100 next year), how much of the $15,100 is excludible from Fred’s income? Amount to be excluded______