Internal Revenue Bulletin:  2007-12 

March 19, 2007 

Notice 2007-25

Revised Housing Cost Amounts Eligible for Exclusion or Deduction


SECTION 1. PURPOSE

This notice provides modifications and additions to the adjusted limitations on housing expenses published in Notice 2006-87, 2006-43 I.R.B. 766, for purposes of section 911 of the Internal Revenue Code (Code).

SECTION 2. BACKGROUND

Notice 2006-87 provides an adjusted limitation on housing expenses for a qualified individual incurring housing expenses in 2006 in one or more of the identified high cost localities to use (in lieu of the otherwise applicable limitation of $24,720) in determining his or her housing expenses under section 911(c)(2)(A) of the Code. Notice 2006-87 also requests comments on the average housing costs for specific locations that differ significantly from the amounts provided in the notice.

In response to comments received on Notice 2006-87, the Internal Revenue Service (IRS) and the Treasury Department are publishing certain modifications and additions to the 2006 housing expense table in Notice 2006-87. The adjusted limitations on housing expenses provided in section 3 supersede and replace the adjusted limitations on housing expenses for 2006 for those specific locations provided in Notice 2006-87. The adjusted limitations on housing expenses provided in section 4 address locations within countries with high housing costs that were not identified in Notice 2006-87, and provide an adjusted limitation on housing expenses for 2006 for these locations. A complete table of the adjusted limitations on housing expenses for 2006 is available on the IRS website at http://www.irs.gov/formspubs under the link “What’s Hot in forms and publications”.

The IRS and the Treasury Department continue to work on guidance for housing expenses for 2007. Based on preliminary indications, the 2007 adjusted limitations on housing expenses for some locations may be lower than the 2006 adjusted limitations on housing expenses in Notice 2006-87 for those locations. The IRS and the Treasury Department intend to provide guidance for housing expenses for 2007 as soon as possible.

SECTION 3. MODIFIED ADJUSTED LIMITATIONS ON HOUSING EXPENSES FOR SPECIFIC LOCATIONS IDENTIFIED IN NOTICE 2006-87

Country Location Limitation on Housing Expenses (daily) Limitation on Housing Expenses (full year)
Austria Vienna 78.97 28,824
Bermuda Bermuda 197.26 72,000
Japan Nagoya 103.52 37,786
Japan Osaka-Kobe 145.30 53,036
Norway Oslo 83.76 30,573
Russia Moscow 207.45 75,720
Ukraine Kiev 89.98 32,844

SECTION 4. ADJUSTED LIMITATIONS ON HOUSING EXPENSES FOR LOCATIONS NOT INCLUDED IN NOTICE 2006-87

Country Location Limitation on Housing Expenses (daily) Limitation on Housing Expenses (full year)
China Beijing 131.51 48,000
China Shanghai 147.95 54,000
India Mumbai 156.19 57,011
India New Delhi 73.75 26,920
Indonesia Jakarta 103.49 37,776
Qatar Doha 95.30 34,786
Saudi Arabia Jeddah 84.02 30,667
Saudi Arabia Riyadh 84.02 30,667
Switzerland Zurich 105.20 38,398
Taiwan Taipei 122.42 44,685
United Arab Emirates Abu Dhabi 82.12 29,973
United Arab Emirates Dubai 116.31 42,452
United Kingdom Basingstoke 112.60 41,099
United Kingdom Gibraltar 122.24 44,616
United Kingdom Surrey 121.51 44,350

SECTION 5. EFFECT ON OTHER DOCUMENTS

Notice 2006-87 is modified and supplemented.

SECTION 6. EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2006.

SECTION 7. DRAFTING INFORMATION

The principal author of this notice is Paul J. Carlino of the Office of Associate Chief Counsel (International). For further information regarding this notice, contact Mr. Carlino at (202) 622-3840 (not a toll-free call).


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