"Frank S. Duke, Jr." <dukefs[at]one.net> wrote:

- quote -

Well, the SHOULD know what they are doing, but any person
who travels outside the US and earns income while outside
the US has foreign source income. You most certainly CAN
allocate the salary from his US employment between US and
foreign source for the purpose of utilizing some or all of
the foreign tax credit carryover. It MIGHT be getting too
late for 2000 (unless the return was on extension, which is
likely in this type of return), but you can certainly amend
2001, 2002, and maybe even 2000, to reflect foreign source
income and reduce the client's tax.

We do it all the time. One of the strategies we recommend
to returning expatriates is finding work that continues to
have them travel outside the US to generate foreign source
income.

- quote -

You don't have to be reassigned to a foreign country. The
problem is when they come back to jobs that don't require
foreign travel. In those situations the FTC carryover often
expires unused.

--
Bruce E. Cobern, CPA
mailto:bec[at]pipeline.com

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Client works for US multinational, was transferred to
Germany for 3 years and came back in 2000 with lots of
foreign tax carryovers unused on 1116 carryover worksheet.
Returns for 2000, 2001 and 2002 done by D&T people who
specialize in this kind of work show no further foreign
income. Assuming that they know more about it than I do, it
still seems that business travel to foreign locations during
those years would qualify as "foreign earned income" and be
eligible to harvest some of that credit.

How does one qualify to take advantage of those credits, if
at all if one continues to work in the US and travel
frequently to foreign locations but not be reassigned there.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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