1040 Doe Case Study Facts: Return Information
Doe Case Study Facts: Introduction
Some data is already entered for you. Use the 1040 Doe Case Study: Data Entry section for instructions and hints on entering any data you are unsure how to enter. You should verify all the information when it has changed or is missing based on the information in these facts.
Taxpayer Information
| Name | Address | SSN | DOB | Employment |
|---|---|---|---|---|
| John M. Doe | 76 Coombe Road London, England KT27AH | 777-77-7777 | 01/01/1961 | Field Representative |
| Mary K. Doe | 888-88-8888 | 03/01/1964 | Homemaker |
Other Basic Information
| Presidential Election Campaign Fund? | No |
| Filing Status | Married, Filing jointly |
| Foreign country, interest in or signature authority over a financial account | United Kingdom |
Dependent Information
| Name | SSN | Date of Birth |
|---|---|---|
| Kent Doe (Son) | 555-22-7654 | 10/01/2007 |
| Mark Doe (Son) | 555-33-1234 | 12/02/2008 |
Savings Accounts, Bonds, and Other Interest
| Interest Income, US | $10,000 |
| Foreign | $5,000 |
Profit or Loss from Business
| Business Name | Doe Consulting |
| Business Address |
76 Coombe Road
|
| Principal Business | Consultant |
| Business Code | 541600 |
| Accounting Method | Cash |
| Inventory Valuation | Cost |
| Allocable to Section 911 income
100% Foreign earned income Consulting fees |
$75,000 |
| Miscellaneous expenses | $25,000 subject to scaledown |
Foreign Residence - General Information
The Does will be residing/maintaining a tax home outside the US on April 15, 2019, and an automatic extension is desired.
Leading zeroes on the activity number will not display on the screen.
| Set Number | 1 |
| Employer | RLC, a US company |
| Employer Address | US, Texas; Foreign, United Kingdom |
Physical Presence Test Information
Principal country of employment during 2019 was the United Kingdom.
Travel Days
| Destination | Arrival Date | Departure Date |
|---|---|---|
| United Kingdom | * 01/01/2019 | 08/31/2019 |
| United States | 08/31/2019 | 09/15/2019
10 Business Days worked in US |
| United Kingdom | 09/15/2019 | No departure date, presence continues. |
* Physical presence began.
Foreign Earned Income Exclusion
| Total foreign housing cost | $37,700 |
Foreign Earned Income Compensation
Wages are foreign source during the foreign assignment.
| Allocation Period | 2019 | |
| Non-cash remuneration earned while on foreign assignment and allocated to days worked in the US | Home | $18,000 |
| Car | $5,000 | |
| Allowances/Reimbursements earned while on foreign assignment and allocated to days worked in the US | Cost of living and overseas differential | $15,904 |
| Education | $12,000 | |
| Other foreign earned income - Tax Equalization | $29,500 | |
| RLC | Base Salary | $200,000 |
| Federal W/H | $55,000 | |
| Social Security wages | $132,900 | |
| Social Security W/H | $8,240 | |
| Medicare wages | $200,000 | |
| Medicare W/H | $2,900 |
Deductible Taxes
Adjust the denominator used in the allocation ratio to total foreign assignment earned income (both US and foreign sources) including current, prior and future year amounts less applicable foreign deductions.
Increase the numerator of the allocation ratio by $3,000.
| Real estate taxes (US property) | $20,000 |
| Personal property taxes (US property) | $1,400 |
| Foreign Tax Credit - Options Accounting method | Paid |
| Country of Residence (if not USA) | United Kingdom |
Foreign Tax Credit - Tax Paid or Accrued
Allocate foreign taxes to exclude income based on taxpayer’s ratio.
| Income Type | Passive Income,
United Kingdom |
| Date tax paid during 2019 | 12/31/2019 |
| Gross income from foreign sourced income (interest) | $5,000 |
| Tax on interest in dollars | $590 |
| Income Type | General Limitation Income (Other), United Kingdom |
| Tax paid in pounds | £5,600 |
| Conversion rate | .60 |
| Date tax paid during 2019 | 12/31/2019 |
Filing Instructions
Austin-International is the IRS Service Center.
Case Study Facts/doe_return_info.htm/TY2019
Last Modified: 03/19/2020
Last System Build: 06/17/2021
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