Yes, I may have a solution to your dilemma. The income must be earned income to qualify for the contribution deduction. Here is the best way to report.
Go back to the section where you entered the information for the Foreign Income Exclusion under the Less Common income heading in federal>wages and income.
- Enter the full amount of your Foreign Income.
- Continue through the interview until it asks if you would like to exclude your income. Say yes.
- Answer all the questions until you reach the screen informing you that you qualify for the exclusion.
- The next screen asks if you have deductions against your foreign income. Here you can report moving expenses or other deductions relating to your move. These deductions will actually reduce your Foreign Income Exclusion and become taxable income in your return.
The amount you claim for deductions will actually appear as taxable income in your return and now you should have income to claim your IRA contribution. I worked this out in my sample return and it appeared correctly.
Let me know if this works. if not, i still have your token. Be sure to delete the previous entry I suggested.
@singermany
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