Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: crre Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: revoking foreign earned income exclusion Date: 4/23/2005 2:48 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
i live abroad, and usually take the foreign earned income exclusion. this year, it would have been to my advantage to revoke the exclusion, and take the foreign tax credit instead. however, once you revoke the exclusion, you cannot claim it again for 5 years without irs approval. the gain i would have received by revoking is not worth the danger that in the next 5 years i would lose money by not being able to take the exclusion. so i didn't revoke for 2004. now, the question:

suppose that next january i calculate that not having the exclusion for 2005 would also be to my advantage, or at least not to my disadvantage, and that in all probability i'd be ok for 2006 as well. assume further that i do the math, and find out that i wouldn't be hurt on 2002 or 2003 either. then, would the following plan work: amend 2002 to revoke the exclusion, amend 2003 and 2004 as well, then file 2005 without the exclusion? this way, i'd be taking away lots of the uncertainty regarding 5 years forward, by setting the clock back to 2002.

note: setting the clock back to 2001 would not be to my advantage, that is why i am not contemplating doing this all right now.

second question: am i right that if i do this, then i am left with only one year of uncertainty, and can claim the exclusion again in 2007? or would it only be 2008? the exact irs wording is "If you revoked a choice and within 5 tax years again wish to choose the same exclusion, you must apply for IRS approval."

tia,

c.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
TMFDeej's CAPS Blog

Name of the Game: Tax Avoidance
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement