Internal Revenue Bulletin:  2010-15 

April 12, 2010 

Notice 2010-27

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2010


SECTION 1. PURPOSE

This notice provides adjustments to the limitation on housing expenses for purposes of section 911 of the Internal Revenue Code (Code) for specific locations for 2010. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States.

SECTION 2. BACKGROUND

Section 911(a) of the Code allows a qualified individual to elect to exclude from gross income the foreign earned income and housing cost amount of such individual. Section 911(c)(1) defines the term “housing cost amount” as an amount equal to the excess of (A) the housing expenses of an individual for the taxable year to the extent such expenses do not exceed the amount determined under section 911(c)(2), over (B) 16 percent of the exclusion amount (computed on a daily basis) in effect under section 911(b)(2)(D) for the calendar year in which such taxable year begins ($250.68 per day for 2010, or $91,500 for the full year), multiplied by the number of days of that taxable year within the applicable period described in section 911(d)(1). The applicable period is the period during which the individual meets the tax home requirement of section 911(d)(1) and either the bona fide residence requirement of section 911(d)(1)(A) or the physical presence requirement of section 911(d)(1)(B). Assuming that the entire taxable year of a qualified individual is within the applicable period, the section 911(c)(1)(B) amount for 2010 is $14,640 ($91,500 x .16).

Section 911(c)(2)(A) of the Code limits the housing expenses taken into account in section 911(c)(1)(A) to an amount equal to (i) 30 percent (adjusted as may be provided under the Secretary’s authority under section 911(c)(2)(B)) of the amount in effect under section 911(b)(2)(D) for the calendar year in which the taxable year of the individual begins, multiplied by (ii) the number of days of that taxable year within the applicable period described in section 911(d)(1). Thus, under this general limitation, a qualified individual whose entire taxable year is within the applicable period is limited to maximum housing expenses of $27,450 ($91,500 x .30) in 2010.

Section 911(c)(2)(B) of the Code authorizes the Secretary to issue regulations or other guidance to adjust the percentage under section 911(c)(2)(A)(i) based on geographic differences in housing costs relative to housing costs in the United States. Pursuant to this authority, the Internal Revenue Service (IRS) and the Treasury Department published Notice 2006-87, 2006-2 C.B. 766, and Notice 2007-25, 2007-1 C.B. 760, for 2006, Notice 2007-77, 2007-2 C.B. 735, for 2007, and Notice 2008-107, 2008-50 I.R.B. 1265, for 2008, to provide adjustments to the limitation on housing expenses for qualified individuals incurring housing expenses in countries with high housing costs relative to housing costs in the United States.

SECTION 3. TABLE OF ADJUSTED LIMITATIONS FOR 2010

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $27,450) for 2010.

Country Location Limitation on Housing Expenses (daily) Limitation on Housing Expenses (full year)
Angola Luanda 230.14 84,000
Argentina Buenos Aires 154.79 56,500
Australia Adelaide 83.29 30,400
Australia Brisbane 82.47 30,100
Australia Gold Coast 82.47 30,100
Australia Melbourne 105.48 38,500
Australia Oakey 82.47 30,100
Australia Perth 112.88 41,200
Australia Sydney 89.81 32,782
Australia Toowoomba 82.47 30,100
Austria Vienna 96.99 35,400
Bahamas, The Nassau 136.16 49,700
Bahrain Bahrain 120.55 44,000
Barbados Barbados 103.29 37,700
Belgium Antwerp 109.59 40,000
Belgium Brussels 144.66 52,800
Belgium Gosselies 129.04 47,100
Belgium Hoogbuul 109.59 40,000
Belgium Mons 129.04 47,100
Belgium SHAPE/Chievres 129.04 47,100
Bermuda Bermuda 246.58 90,000
Bosnia-Herzegovina Sarajevo 92.05 33,600
Brazil Brasilia 151.51 55,300
Brazil Rio de Janeiro 96.16 35,100
Brazil Sao Paulo 127.40 46,500
Canada Calgary 105.75 38,600
Canada Dartmouth 92.60 33,800
Canada Edmonton 96.16 35,100
Canada Halifax 92.60 33,800
Canada London, Ontario 77.81 28,400
Canada Montreal 156.71 57,200
Canada Ottawa 129.32 47,200
Canada Toronto 128.22 46,800
Canada Vancouver 122.74 44,800
Canada Victoria 90.96 33,200
Canada Winnipeg 84.66 30,900
Cayman Islands Grand Cayman 131.51 48,000
Chile Santiago 136.99 50,000
China Beijing 195.07 71,200
China Hong Kong 313.15 114,300
China Shanghai 156.17 57,001
Colombia Bogota 148.22 54,100
Colombia All cities other than Bogota and Barranquilla 135.34 49,400
Denmark Copenhagen 119.74 43,704
Dominican Republic Santo Domingo 124.66 45,500
Ecuador Guayaquil 84.38 30,800
Ecuador Quito 83.56 30,500
Estonia Tallinn 127.67 46,600
France Garches 257.26 93,900
France Le Havre 108.22 39,500
France Lyon 146.58 53,500
France Marseille 136.99 50,000
France Montpellier 121.37 44,300
France Paris 257.26 93,900
France Sevres 257.26 93,900
France Suresnes 257.26 93,900
France Versailles 257.26 93,900
Germany Babenhausen 126.30 46,100
Germany Bad Aibling 107.67 39,300
Germany Bad Nauheim 100.82 36,800
Germany Baumholder 120.55 44,000
Germany Berlin 154.25 56,300
Germany Birkenfeld 120.55 44,000
Germany Boeblingen 153.15 55,900
Germany Bonn 115.07 42,000
Germany Butzbach 98.63 36,000
Germany Darmstadt 126.30 46,100
Germany Erlangen 79.73 29,100
Germany Frankfurt am Main 131.78 48,100
Germany Friedberg 100.82 36,800
Germany Fuerth 79.73 29,100
Germany Garmisch-Partenkirchen 115.07 42,000
Germany Geilenkirchen 82.19 30,000
Germany Gelnhausen 158.90 58,000
Germany Germersheim 95.34 34,800
Germany Giebelstadt 109.04 39,800
Germany Giessen 98.63 36,000
Germany Grafenwoehr 124.11 45,300
Germany Hanau 158.90 58,000
Germany Hannover 94.25 34,400
Germany Heidelberg 119.45 43,600
Germany Idar-Oberstein 120.55 44,000
Germany Ingolstadt 177.81 64,900
Germany Kaiserslautern, Landkreis 154.52 56,400
Germany Kitzingen 109.04 39,800
Germany Leimen 119.45 43,600
Germany Ludwigsburg 153.15 55,900
Germany Mainz 170.41 62,200
Germany Mannheim 119.45 43,600
Germany Munich 177.81 64,900
Germany Nellingen 153.15 55,900
Germany Neubruecke 120.55 44,000
Germany Nuernberg 79.73 29,100
Germany Ober Ramstadt 126.30 46,100
Germany Oberammergau 115.07 42,000
Germany Pirmasens 154.52 56,400
Germany Rheinau 119.45 43,600
Germany Schwabach 79.73 29,100
Germany Schwetzingen 119.45 43,600
Germany Seckenheim 119.45 43,600
Germany Sembach 154.52 56,400
Germany Stuttgart 153.15 55,900
Germany Vilseck 124.11 45,300
Germany Wahn 115.07 42,000
Germany Wertheim 109.04 39,800
Germany Wiesbaden 170.41 62,200
Germany Wuerzburg 109.04 39,800
Germany Zimdorf 79.73 29,100
Germany Zweibrueken 154.52 56,400
Germany All cities other than Augsburg, Babenhausen, Bad Aibling, Bad Kreuznach, Bad Nauheim, Baumholder, Berchtesgaden, Berlin, Birkenfeld, Boeblingen, Bonn, Bremen, Bremerhaven, Butzbach, Cologne, Darmstadt, Delmenhorst, Duesseldorf, Erlangen, Flensburg, Frankfurt am Main, Friedberg, Fuerth, Garlstedt, Garmisch-Partenkirchen, Geilenkirchen, Gelnhausen, Germersheim, Giebelstadt, Giessen, Grafenwoehr, Grefrath, Greven, Gruenstadt, Hamburg, Hanau, Handorf, Hannover, Heidelberg, Heilbronn, Herongen, Idar-Oberstein, Ingolstadt, Kaiserslautern, Landkreis, Kalkar, Karlsruhe, Kerpen, Kitzingen, Koblenz, Leimen, Leipzig, Ludwigsburg, Mainz, Mannheim, Mayen, Moenchen-Gladbach, Muenster, Munich, Nellingen, Neubruecke, Noervenich, Nuernberg, Ober Ramstadt, Oberammergau, Osterholz-Scharmbeck, Pirmasens, Rheinau, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zimdorf, and Zweibrueken 122.19 44,600
Ghana Accra 98.63 36,000
Greece Argyroupolis 98.36 35,900
Greece Athens 120.55 44,000
Greece Elefsis 120.55 44,000
Greece Ellinikon 120.55 44,000
Greece Mt. Hortiatis 98.36 35,900
Greece Mt. Parnis 120.55 44,000
Greece Mt. Pateras 120.55 44,000
Greece Nea Makri 120.55 44,000
Greece Perivolaki 98.36 35,900
Greece Piraeus 120.55 44,000
Greece Souda Bay (Crete) 78.63 28,700
Greece Tanagra 120.55 44,000
Greece Thessaloniki 98.36 35,900
Guatemala Guatemala City 108.49 39,600
Guyana Georgetown 95.89 35,000
Holy See, The Holy See, The 171.23 62,500
Hungary Budapest 89.04 32,500
Hungary Papa 121.92 44,500
India Mumbai 186.08 67,920
India New Delhi 82.88 30,252
Indonesia Jakarta 103.50 37,776
Ireland Dublin 149.04 54,400
Ireland Limerick 84.11 30,700
Ireland Shannon Area 114.52 41,800
Israel Tel Aviv 139.18 50,800
Italy Catania 100.27 36,600
Italy Genoa 110.68 40,400
Italy Gioia Tauro 85.48 31,200
Italy La Spezia 110.68 40,400
Italy Leghorn 107.40 39,200
Italy Milan 256.16 93,500
Italy Naples 162.47 59,300
Italy Pisa 107.40 39,200
Italy Pordenone-Aviano 130.14 47,500
Italy Rome 171.23 62,500
Italy Sardinia 87.95 32,100
Italy Sigonella 100.27 36,600
Italy Turin 128.22 46,800
Italy Verona 81.92 29,900
Italy Vicenza 131.23 47,900
Italy All cities other than Avellino, Brindisi, Catania, Florence, Gaeta, Genoa, Gioia Tauro, La Spezia, Leghorn, Milan, Mount Vergine, Naples, Nettuno, Pisa, Pordenone-Aviano, Rome, Sardinia, Sigonella, Turin, Verona, and Vicenza. 103.01 37,600
Jamaica Kingston 112.88 41,200
Japan Akashi 98.63 36,000
Japan Akizuki 86.85 31,700
Japan Atsugi 124.66 45,500
Japan Camp Zama 124.66 45,500
Japan Chiba-Ken 124.66 45,500
Japan Fussa 124.66 45,500
Japan Gifu 80.00 29,200
Japan Gotemba 94.25 34,400
Japan Haneda 124.66 45,500
Japan Iwakuni 88.77 32,400
Japan Kanagawa-Ken 124.66 45,500
Japan Komaki 80.00 29,200
Japan Machidi-Shi 124.66 45,500
Japan Misawa 108.22 39,500
Japan Nagoya 103.52 37,786
Japan Okinawa Prefecture 154.52 56,400
Japan Osaka-Kobe 248.39 90,664
Japan Sagamihara 124.66 45,500
Japan Saitama-Ken 124.66 45,500
Japan Sasebo 103.29 37,700
Japan Tachikawa 124.66 45,500
Japan Tokyo 295.62 107,900
Japan Tokyo-to 124.66 45,500
Japan Yokohama 162.19 59,200
Japan Yokosuka 150.41 54,900
Japan Yokota 124.66 45,500
Kazakhstan Almaty 131.51 48,000
Korea Camp Carroll 77.53 28,300
Korea Camp Colbern 140.82 51,400
Korea Camp Market 140.82 51,400
Korea Camp Mercer 140.82 51,400
Korea K-16 140.82 51,400
Korea Kimpo Airfield 140.82 51,400
Korea Munsan 85.21 31,100
Korea Osan AB 87.95 32,100
Korea Pyongtaek 86.30 31,500
Korea Seoul 140.82 51,400
Korea Suwon 140.82 51,400
Korea Taegu 85.48 31,200
Korea Uijongbu 82.47 30,100
Korea Waegwan 77.53 28,300
Korea All cities other than Ammo Depot #9, Camp Carroll, Camp Colbern, Camp Market, Camp Mercer, Changwon, Chinhae, Chunchon, K-16, Kimhae, Kimpo Airfield, Kunsun, Kwangju, Munsan, Osan AB, Pusan, Pyongtaek, Seoul, Suwon, Taegu, Tongduchon, Uijongbu, and Waegwan 80.27 29,300
Kuwait Kuwait City 176.44 64,400
Kuwait All cities other than Kuwait City 158.08 57,700
Luxembourg Luxembourg 140.55 51,300
Macedonia Skopje 96.99 35,400
Malaysia Kuala Lumpur 126.58 46,200
Malaysia All cities other than Kuala Lumpur 92.33 33,700
Malta Malta 131.51 48,000
Mexico Hermosillo 76.16 27,800
Mexico Mazatlan 84.93 31,000
Mexico Merida 103.84 37,900
Mexico Mexico City 125.21 45,700
Mexico Monterrey 90.96 33,200
Mexico All cities other than Ciudad Juarez, Cuernavaca, Guadalajara, Hermosillo, Matamoros, Mazatlan, Merida, Metapa, Mexico City, Monterrey, Nogales, Nuevo Laredo, Tapachula, Tijuana, Tuxtla Gutierrez, and Veracruz 107.95 39,400
Micronesia Pohnpei 77.26 28,200
Mozambique Maputo 98.63 36,000
Namibia Windhoek 87.95 32,100
Netherlands Amsterdam 144.93 52,900
Netherlands Aruba 98.63 36,000
Netherlands Brunssum 117.26 42,800
Netherlands Eygelshoven 117.26 42,800
Netherlands Hague, The 196.44 71,700
Netherlands Heerlen 117.26 42,800
Netherlands Hoensbroek 117.26 42,800
Netherlands Hulsberg 117.26 42,800
Netherlands Kerkrade 117.26 42,800
Netherlands Landgraaf 117.26 42,800
Netherlands Maastricht 117.26 42,800
Netherlands Papendrecht 123.01 44,900
Netherlands Rotterdam 123.01 44,900
Netherlands Schaesburg 117.26 42,800
Netherlands Schinnen 117.26 42,800
Netherlands Schiphol 144.93 52,900
Netherlands Ypenburg 196.44 71,700
Netherlands All cities other than Amsterdam, Aruba, Brunssum, Coevorden, Eygelshoven, The Hague, Heerlen, Hoensbroek, Hulsberg, Kerkrade, Landgraaf, Maastricht, Margraten, Papendrecht, Rotterdam, Schaesburg, Schinnen, Schiphol, and Ypenburg. 104.93 38,300
Netherlands Antilles Curacao 125.48 45,800
New Zealand Auckland 97.81 35,700
New Zealand Wellington 92.60 33,800
Nicaragua Managua 87.12 31,800
Norway Oslo 145.21 53,000
Norway Stavanger 123.56 45,100
Norway All cities other than Oslo and Stavanger. 103.29 37,700
Panama Panama City 97.26 35,500
Philippines Cavite 100.00 36,500
Philippines Manila 100.00 36,500
Philippines All cities other than Cavite and Manila 76.44 27,900
Poland Poland 80.55 29,400
Portugal Alverca 156.71 57,200
Portugal Lajes Field 84.11 30,700
Portugal Lisbon 156.71 57,200
Qatar Doha 99.35 36,264
Qatar All cities other than Doha 88.77 32,400
Russia Moscow 295.89 108,000
Russia Saint Petersburg 164.38 60,000
Russia Sakhalin Island 212.33 77,500
Russia Vladivostok 212.33 77,500
Russia Yekaterinburg 129.86 47,400
Rwanda Kigali 86.30 31,500
Saudi Arabia Jeddah 84.02 30,667
Saudi Arabia Riyadh 109.59 40,000
Singapore Singapore 171.78 62,700
South Africa Pretoria 107.67 39,300
Spain Barcelona 111.23 40,600
Spain Madrid 209.04 76,300
Spain Rota 120.55 44,000
Spain Valencia 120.00 43,800
Spain All cities other than Barcelona, Madrid, Rota, and Valencia 90.68 33,100
Suriname Paramaribo 90.41 33,000
Switzerland Bern 169.32 61,800
Switzerland Geneva 232.60 84,900
Switzerland Zurich 107.45 39,219
Switzerland All cities other than Bern, Geneva and Zurich 90.14 32,900
Taiwan Taipei 126.54 46,188
Thailand Bangkok 140.00 51,100
Turkey Ankara 87.95 32,100
Turkey Elmadag 87.95 32,100
Turkey Izmir-Cigli 86.58 31,600
Turkey Manzarali 87.95 32,100
Turkey Yamanlar 86.58 31,600
Ukraine Kiev 197.26 72,000
United Arab Emirates Abu Dhabi 136.13 49,687
United Arab Emirates Dubai 156.64 57,174
United Kingdom Basingstoke 112.60 41,099
United Kingdom Bath 112.33 41,000
United Kingdom Bracknell 170.14 62,100
United Kingdom Bristol 106.03 38,700
United Kingdom Cambridge 117.81 43,000
United Kingdom Caversham 202.19 73,800
United Kingdom Cheltenham 147.67 53,900
United Kingdom Croughton 121.10 44,200
United Kingdom Fairford 121.10 44,200
United Kingdom Farnborough 149.86 54,700
United Kingdom Felixstowe 115.07 42,000
United Kingdom Gibraltar 122.24 44,616
United Kingdom Harrogate 127.12 46,400
United Kingdom High Wycombe 170.14 62,100
United Kingdom Kemble 121.10 44,200
United Kingdom Lakenheath 150.41 54,900
United Kingdom Liverpool 106.30 38,800
United Kingdom London 233.15 85,100
United Kingdom Loudwater 173.97 63,500
United Kingdom Menwith Hill 127.12 46,400
United Kingdom Mildenhall 150.41 54,900
United Kingdom Oxfordshire 121.10 44,200
United Kingdom Plymouth 121.10 44,200
United Kingdom Portsmouth 121.10 44,200
United Kingdom Reading 170.14 62,100
United Kingdom Rochester 125.75 45,900
United Kingdom Southampton 121.10 44,200
United Kingdom Surrey 132.61 48,402
United Kingdom Waterbeach 129.59 47,300
United Kingdom Wiltshire 113.97 41,600
United Kingdom All cities other than Basingstoke, Bath, Belfast, Birmingham, Bracknell, Bristol, Brough, Bude, Cambridge, Caversham, Chelmsford, Cheltenham, Chicksands, Croughton, Dunstable, Edinburgh, Edzell, Fairford, Farnborough, Felixstowe, Ft. Halstead, Gibraltar, Glenrothes, Greenham Common, Harrogate, High Wycombe, Hythe, Kemble, Lakenheath, Liverpool, London, Loudwater, Menwith Hill, Mildenhall, Nottingham, Oxfordshire, Plymouth, Portsmouth, Reading, Rochester, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire. 119.45 43,600
Venezuela Caracas 156.16 57,000
Vietnam Hanoi 128.22 46,800
Vietnam Ho Chi Minh City 115.07 42,000

SECTION 4. HOUSING LIMITATION FOR 2009

Except as provided in section 5, the limitation for qualified individuals incurring housing expenses in taxable years beginning in 2009 is as follows. For taxable years beginning in calendar year 2009, the foreign earned income exclusion amount under § 911(b)(2)(D) is $91,400. Thus, a qualified individual whose entire 2009 taxable year is within the applicable period is generally limited to maximum housing expenses of $27,420 ($91,400 x .30). Because location amounts were not published for 2009, qualified individuals incurring housing expenses in 2009 in locations listed in the “Table of Adjusted Limitations for 2008” in Notice 2008-107 should use the amounts found in that table (which can also be found in the Instructions to Form 2555 (2009)) to determine their adjusted limitation for 2009.

SECTION 5. ELECTION TO APPLY 2010 ADJUSTED LIMITATIONS TO 2009 TAXABLE YEAR

For some locations, the limitation on housing expenses provided in section 3 of this notice may be higher than the limitation on housing expenses provided in the “Table of Adjusted Limitations for 2008” in Notice 2008-107. A qualified individual incurring housing expenses in such a location during 2009 may apply the adjusted limitation on housing expenses provided in section 3 of this notice in lieu of the amounts provided in the “Table of Adjusted Limitations for 2008” in Notice 2008-107 (and as set forth in the Instructions to Form 2555 (2009)).

Treasury and the IRS anticipate that future annual notices providing adjustments to housing expense limitations will make a similar election available to qualified individuals that incur housing expenses in the immediately preceding year. For example, when adjusted housing expense limitations for 2011 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2010 taxable year.

EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2006-87, 2006-2 C.B. 766, Notice 2007-25, 2007-1 C.B. 760, Notice 2007-77, 2007-2 C.B. 735, and Notice 2008-107, 2008-50 I.R.B. 1265.

EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2010. However, as provided in section 5, a taxpayer may elect to apply the 2010 adjusted housing limitations contained in section 3 of this notice to his or her taxable year beginning in 2009.

DRAFTING INFORMATION

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


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