I don't believe an IRA is considered earned income for the foreign earned income exclusion. An IRA is a tax favored savings account not earned income. You can take a tax credit on the 1116 for the IRA that was taxed by U.S. and his home country (depending if there is a tax treaty involved) When filling out the 1116 you need to quick zoom to the worksheet at top of 1116 for data entry, as you can't enter directly on the 1116