Foreign earned income exclusion resulting in nol?

Forum|Forum|4 years ago
April 16, 2022
6 replies
24 views

I have a client that has lived overseas for several years and wanted to get up to date with his filings since he will be moving back to the US shortly. All his earned income is from overseas, in preparing the 2555, its creating a net of loss that is rolling over to the following year. Is that correct?

ProSeries Professional

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itonewbie

Level 15

It couldn't have. Check your worksheet again. That's because foreign earned income exclusion can't exceed your client's foreign earned income.

---------------------------------------------------------------------------------Still an AllStar

itonewbie

Level 15

If your client never filed his US returns to claim foreign earned income exclusion, check also that he still is eligible for late election.

Depending on your client's level of income and whether there's any US source income, your client may, however, have SLL, OFL, and/or ODL for foreign tax credit purposes, which would be subject to recapture.

---------------------------------------------------------------------------------Still an AllStar

E

EAintheVIAuthor

Level 3

Yes he has filed previous tax returns with foreign earned income exclusively. He is currently trying to get the last 3 years prepared. The return he brought me for reference has a NOL rolling forward. He has no us source income of any kind.

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