Foreign Earned Income Exclusion: Tax Home for less than 12 months

  • Thread starter JamesAndCourtney.bowen
  • Start date



Hello all,

I am currently residing and working in Malaysia, and am confused about
a detail of the Foreign Earned Income Exclusion: Is a minimum 12-month
period actually necessary for the Tax Home requirement?
I started working and living here at the start of Feb. '08 and had
every intention and plan of staying here 2-5 years on assignment (with
a Malaysian Corporation that I partially control), but circumstances
are cutting my foreign stay short. However, I intend to work/live here
through early December, and then complete my Physical Presence Test
330 day requirement via a trip (either business or pleasure, or a mix)
to Mexico from December to January. (I will return to the USA BEFORE
February '09.)

As I read Publication 54 and Revenue Ruling 93-86, since my intent was
to work in this foreign country for well more than 1 year, the fact
that my assignment is now being cut short of 1 year is irrelevant. My
intent can be seen from the planning I did up front, from the fact
that we signed a 2-year condo lease in Malaysia, that I brought my
wife and child here with me, that we bought rather than renting a car
here, that we were active in local organizations, etc. It seems that
as long as I meet the 330 day physical presence test (in Malaysia plus
Mexico in this case), I will qualify for the FEIE.

Is this correct? Does the fact that I'm taking a trip (which may be
all or partially vacation) to a different country (other than the one
I've established as my tax home) at the tail-end of this 330-day
Physical Presence period matter or hurt my case at all?

Thank you!


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