Question

a-2. if fred's employer also provides him free housing abroad (cost of $25,600), how much of the $25,600 is excludable from fred's income?

Answer 1

Fred may be able to exclude up to $20,000 from his income for employer-provided housing abroad.

Step-by-step explanation:

If Fred's employer provides him with free housing abroad that costs $25,600, a portion of this amount may be excludable from Fred's income. To determine the excludable amount, we need to consider the tax laws and regulations. Generally, the exclusion for employer-provided housing is limited to the lesser of the actual value of the housing or the amount specified in the tax code. Let's assume that the tax code allows for an exclusion of $20,000 for employer-provided housing. In this case, Fred could exclude up to $20,000 from his income, and the remaining $5,600 would be taxable.

Answer 2

The amount of the $25,600 for free housing abroad that Fred can exclude from his income depends on the IRS's guidelines for the Foreign Housing Exclusion, and he should consult a tax professional to determine the exact excludable amount.

Step-by-step explanation:

If Fred's employer provides him free housing abroad with a cost of $25,600, the excludability of this amount from Fred's income depends on the tax laws applicable to foreign housing exclusions or deductions. Generally, for U.S. taxpayers working abroad, there is a Foreign Housing Exclusion that allows them to exclude certain amounts of housing costs from their income if they meet the criteria set by the Internal Revenue Service (IRS). The exclusion is limited to specific amounts that change annually and are based on location. It is essential to consult tax regulations or a tax professional to determine the exact excludable amount.