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pillitto
Level 2

Basic questions about "Foreign Housing Exclusion"

I'm trying to figure out if I am able to claim "Foreign Housing Exclusion." PUB 54 p.21 says right underneath the above heading:

 

The housing exclusion applies only to amounts considered paid for with employer-provided amounts.

 

1) Does this mean that I have to have an employer?  

2) I'm paying not for the house but for the land on which the house stands. Can this be included in Foreign House Exclusion in addition to insurances etc?

 

Thanks

1 Best answer

Accepted Solutions
GiseleD
Expert Alumni

Basic questions about "Foreign Housing Exclusion"

1) If none of the taxpayer’s housing amount is considered pay for with employer-provided amounts, such as when all of the taxpayer’s income is from self-employment, he or she can deduct his or her housing amount, subject to certain limits (generally 30% of the maximum foreign earned income exclusion (computed on a daily basis), multiplied by the number of days in the taxpayer’s qualifying period that fall within the tax year. For 2019 this is generally $87.04 per day ($31,770 per year)).

 

2) Housing expenses include:

•Rent,

•The fair rental value of housing provided in kind by the employer,

•Repairs,

•Utilities (other than telephone charges),

Real and personal property insurance,

•Nondeductible occupancy taxes,

•Nonrefundable fees for securing a leasehold,

•Rental of furniture and accessories, and

•Residential parking.

 

Housing expenses do not include:

•Expenses that are lavish or extravagant under the circumstances,

•Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation),

The cost of buying property, including principal payments on a mortgage,

•The cost of domestic labor (maids, gardeners, etc.),

•Pay television subscriptions,

Improvements and other expenses that increase the value or appreciably prolong the life of property,

•Purchased furniture or accessories, or

•Depreciation or amortization of property or improvements

 

The insurance is deductible, but paying for the land may not be if you purchased it and are not renting it.

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1 Reply
GiseleD
Expert Alumni

Basic questions about "Foreign Housing Exclusion"

1) If none of the taxpayer’s housing amount is considered pay for with employer-provided amounts, such as when all of the taxpayer’s income is from self-employment, he or she can deduct his or her housing amount, subject to certain limits (generally 30% of the maximum foreign earned income exclusion (computed on a daily basis), multiplied by the number of days in the taxpayer’s qualifying period that fall within the tax year. For 2019 this is generally $87.04 per day ($31,770 per year)).

 

2) Housing expenses include:

•Rent,

•The fair rental value of housing provided in kind by the employer,

•Repairs,

•Utilities (other than telephone charges),

Real and personal property insurance,

•Nondeductible occupancy taxes,

•Nonrefundable fees for securing a leasehold,

•Rental of furniture and accessories, and

•Residential parking.

 

Housing expenses do not include:

•Expenses that are lavish or extravagant under the circumstances,

•Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation),

The cost of buying property, including principal payments on a mortgage,

•The cost of domestic labor (maids, gardeners, etc.),

•Pay television subscriptions,

Improvements and other expenses that increase the value or appreciably prolong the life of property,

•Purchased furniture or accessories, or

•Depreciation or amortization of property or improvements

 

The insurance is deductible, but paying for the land may not be if you purchased it and are not renting it.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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