Fred currently earns $9,600 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,600 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900.

a. If Freds employer also provides him free housing abroad (cost of $20,600), how much of the $20,600 is excludable from Freds income?

b. Suppose that Fred's employer has offered Fred a six-month overseas assignment beginning on January 1 of next year. How much U.S. gross income will Fred report next year if he accepts the six-month assignment abroad and returns home on July 1 of next year?