David Bell is an America expatriate who has recently been se

David Bell is an America expatriate who has recently been seconded from an American head office to oversee the new marketing division of a newly set-up Singapore subsidiary. David arrived in Singapore on 1 November 2014 and commenced his 15-month quarterly basis, David\'s monthly salary of $15,000 will be credited directly into David\'s bank account in USA. The first payment of $45,000 was made on 1 November 2014. Other expenses paid to David up to 31 December 2014 were as follows: employment with the Singapore company from that same date. On a () Travel expense to relocate David and his wife to Singapore .$30,000 (i) Premium for 2 months to 31 December 2014 on an accident insurance policy to insure against David\'s work-related injuries. Any payout under the policy will be paid to the Singapore employer as beneficiary, with the amount then disbursed by David as compensation for his injuries 120 (ii) 3 months rental from 1 November 2014 to 31 January 2015 for an unfurnished apartment with an annual value of $108,000. The apartment was made available to David and his wife as their place of residence in Singapore 27,000 (iv) One return air passage for each of David\'s two sons, aged 11 and 14 years, to enable them to spend Christmas with the family in Singapore. Both sons are studying in USA 10,000 Required: Advise David of the following a) his residency status for the relevant years of assessment; and b) his taxable remuneration for the Year of Assessment 2015 from his employment in Singapore, giving reasons for the taxability or otherwise of the various items \"END OF ASSIGNMENT Page 2 of 2

Solution

1 You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 1. 31 days during the current year, and 2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: All the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year. Since David was out of US for only 2 months in a year, therefore he passed the substantial tyest and is a US resident 2 Taxable remuneration Salary for 2 months            30,000 Taxable Relocation expense            30,000 Non Taxable Insurance                  120 Taxable House Rental            27,000 Taxable Air passage for children            10,000 Taxable Total taxable remuneration            67,120