Originally Posted by
got2fly
There is no news here. You can live overseas, but if you are employed in the USA there is no foreign earned income exemption because it is not foreign earned income! I lived and worked overseas and had the foreign earned income exemption. Then I took a job for a USA company for 6 months while still maintaining my residence overseas, and did not establish any residence in the USA. I was not able to take the foreign earned income exemption for that calendar year. Any $30 tax software program will keep you from making that mistake. The foreign earned income exemption is still in place for people who are bonafide residents of a foreign country and are employed in that country for an entire tax year. There is no mystery here. Just follow the rules. Turbotax basic or H&R Block basic software or will keep you out of trouble.
Sorry for the second reply. But just as a point of clarification it does appear from the article that the issue is not one of whether you are a bonafide resident of a foreign country, but rather where your income is earned. The tax court ruled that income earned in international airspace (or waters) is not eligible for the foreign earned income exclusion regardless of where you live or what company you work for.