ACCOUNTING
C:16-44 Foreign-Earned Income Exclusion. Dillon, a U.S. citizen, resides in Country K for all of 2010. Dillon is married, files a joint return and claims two personal exemptions. The following items pertain to his 2010 activities:
Salary and allowances (other than for housing) a $175,000
Housing allowance 28,000
Employment-related expenses b 7,500
Housing costs 30,000
Other itemized deductions 4,000
Country K income taxes 12,000
a) All of Dillon’s salary and allowances are attributable to services performed in Country K.
b) Dillon claims the employment-related expenses as itemized deductions.
What is Dillon’s net U.S. tax liability for 2010 (assume that Dillon excludes his earned income and housing cost amount)?
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