Foreign Housing Exclusion And Deduction

DEFINITION of 'Foreign Housing Exclusion And Deduction'

An allowance for taxpayers who live and work in a foreign country to exclude any amount that their employer allocates to them to cover housing costs. The exclusion applies regardless of whether the expenses are paid directly to the taxpayer or on his or her behalf. This exclusion applies for expenses related to housing, rent, repairs, utilities and several other types of expenses.

BREAKING DOWN 'Foreign Housing Exclusion And Deduction'

In order to qualify for this exclusion, taxpayers must meet the same time criteria as for the bona fide resident or physical-presence tests. Qualifying expenses may also include payments intended to equalize taxes and education expenses for the taxpayer's children or dependents. Costs relating to the purchase of property or the employ of domestic servants do not qualify for the exclusion.

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RELATED FAQS
  1. Can I take another exclusion in 2016 for selling my current condo?

    I sold one house in May 2012 and made about $100,000 and put it down on a condo on June 1, 2012. I have lived in the condo ... Read Answer >>
  2. Will I have to pay taxes by selling a condo and buying another?

    I sold a house in 2015 and purchased a condo at a lower price. Now I want to sell the current condo an... Read Answer >>
  3. Is there a home tax exemption for my deceased spouse?

    I have to sell my home. I understand the $250,000 tax exemption. My wife recently passed away. Can I retain her tax exemption?  ... Read Answer >>
  4. What unforeseen circumstances affect what I'll pay in capital gains taxes?

    The IRS has outlined some unique circumstances that could qualify you for a reduced capital gains tax exclusion. Read Answer >>
  5. Will we need to pay capital gains tax on our home that we owned for less than a year?

    We are in Texas. We bought a house 10 months ago with a sales price of $255K. We put a down payment of $75K on it. We ... Read Answer >>
  6. How do I know whether to itemize deductions or take the standard deduction?

    Taking the standard deduction is the easiest and most common method chosen by filers, but many taxpayers may wind up paying ... Read Answer >>
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