Category - Expat FAQs

Yes, but the exclusion is a very nice tax break. First, you cannot claim a foreign tax credit or a foreign tax deduction on the income you exclude. Generally speaking any credit or deduction that you normally would be allowed to take cannot be taken [...]

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The only exception or waiver to the time requirements is if you have to leave due to civil unrest, war or similar adverse conditions. You must demonstrate that you reasonably could have expected to meet the minimum time requirements if the adverse [...]

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Perhaps. This is an extremely sticky wicket. Generally speaking if you intend to return to the state that you resided in just prior to moving overseas, that state is going to claim you as their resident during the entire time you are abroad. Think of[...]

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Yes, if it meets all the usual tests of a domestic home. The loan must be an acquisition loan (one to purchase the home), and it must be secured by the home. The two home (main home and second home) limit applies in addition to the $1 million total [...]

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No. You can switch back and forth depending on your circumstances. For each tax year you must satisfy an entire test’s requirements, either the bona fide residence test or the physical presence test. It is common to pass the physical presence test [...]

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Perhaps. You can vote by absentee ballot in any election held in the United States without risking your losing your status as a bona fide resident. However, if you give information to the local election officials about the nature and length of your [...]

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The IRS would do a happy dance if each foreign income earner would make currency conversions on a daily basis. However, the IRS also allows you to do a quarterly or annual conversion, especially if the foreign currency is pegged to the US dollar or [...]

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Foreign rental properties owned by United States citizens are treated the same way as domestic rental properties with the exception of depreciation. Under IRC Section 168(g)(1)(A), ‘any tangible property which during the taxable year is used [...]

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There are several small hoops, pitfalls, and gotchas that you need to be careful with, but the big requirements are[...]

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Relocation packages, incentives, signing bonuses, reimbursements, etc. might be considered taxable earned income and therefore eligible for the foreign earned income exclusion. You must include as earned income the following[...]

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