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!