Internal Revenue Bulletin:  2011-8 

February 22, 2011 

Notice 2011-8

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2011


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 2011. 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 ($254.52 per day for 2011, or $92,900 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 2011 is $14,864 ($92,900 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 $27,870 ($92,900 x .30) in 2011.

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, Notice 2008-107, 2008-2 C.B. 1266, for 2008 and 2009, and Notice 2010-27, for 2009 and 2010 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 2011

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $27,870) for 2011.

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 89.86 32,800
Australia Brisbane 88.77 32,400
Australia Canberra 78.08 28,500
Australia Gold Coast 88.77 32,400
Australia Melbourne 113.70 41,500
Australia Oakey 88.77 32,400
Australia Perth 121.64 44,400
Australia Sydney 89.81 32,782
Australia Toowoomba 88.77 32,400
Austria Vienna 96.99 35,400
Bahamas, The Nassau 136.16 49,700
Bahrain All cities in Bahrain 120.55 44,000
Barbados All cities in Barbados 103.29 37,700
Belgium Antwerp 98.90 36,100
Belgium Brussels 134.52 49,100
Belgium Gosselies 121.92 44,500
Belgium Hoogbuul 98.90 36,100
Belgium Mons 121.92 44,500
Belgium SHAPE/Chievres 121.92 44,500
Bermuda Bermuda 246.58 90,000
Bosnia-Herzegovina Sarajevo 83.84 30,600
Brazil Brasilia 152.33 55,600
Brazil Rio de Janeiro 96.16 35,100
Brazil Sao Paulo 127.40 46,500
Canada Calgary 116.44 42,500
Canada Dartmouth 97.26 35,500
Canada Edmonton 101.10 36,900
Canada Halifax 97.26 35,500
Canada London, Ontario 86.30 31,500
Canada Montreal 164.66 60,100
Canada Ottawa 143.56 52,400
Canada Quebec 77.26 28,200
Canada Toronto 140.00 51,100
Canada Vancouver 133.97 48,900
Canada Victoria 95.34 34,800
Canada Winnipeg 93.97 34,300
Cayman Islands Grand Cayman 131.51 48,000
Chile Santiago 151.51 55,300
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
Costa Rica San Jose 83.29 30,400
Denmark Copenhagen 119.74 43,704
Dominican Republic Santo Domingo 124.66 45,500
Ecuador Guayaquil 84.38 30,800
Ecuador Quito 88.77 32,400
Estonia Tallinn 127.67 46,600
France Garches 232.33 84,800
France Le Havre 96.16 35,100
France Lyon 134.25 49,000
France Marseille 125.21 45,700
France Montpellier 107.95 39,400
France Paris 232.33 84,800
France Sevres 232.33 84,800
France Suresnes 232.33 84,800
France Versailles 232.33 84,800
Germany Babenhausen 113.97 41,600
Germany Bad Aibling 97.26 35,500
Germany Bad Nauheim 91.23 33,300
Germany Baumholder 109.04 39,800
Germany Berlin 139.18 50,800
Germany Birkenfeld 109.04 39,800
Germany Boeblingen 138.08 50,400
Germany Bonn 115.07 42,000
Germany Butzbach 89.04 32,500
Germany Cologne 153.97 56,200
Germany Darmstadt 113.97 41,600
Germany Frankfurt am Main 118.90 43,400
Germany Friedberg 91.23 33,300
Germany Garmisch-Partenkirchen 103.84 37,900
Germany Gelnhausen 143.56 52,400
Germany Germersheim 86.03 31,400
Germany Giebelstadt 98.36 35,900
Germany Giessen 98.63 36,000
Germany Grafenwoehr 112.05 40,900
Germany Hanau 143.56 52,400
Germany Hannover 84.93 31,000
Germany Heidelberg 107.95 39,400
Germany Idar-Oberstein 109.04 39,800
Germany Ingolstadt 160.55 58,600
Germany Kaiserslautern, Landkreis 139.45 50,900
Germany Kitzingen 98.36 35,900
Germany Leimen 107.95 39,400
Germany Ludwigsburg 138.08 50,400
Germany Mainz 153.97 56,200
Germany Mannheim 107.95 39,400
Germany Munich 160.55 58,600
Germany Nellingen 138.08 50,400
Germany Neubruecke 109.04 39,800
Germany Ober Ramstadt 113.97 41,600
Germany Oberammergau 103.84 37,900
Germany Pirmasens 139.45 50,900
Germany Rheinau 107.95 39,400
Germany Schwetzingen 107.95 39,400
Germany Seckenheim 107.95 39,400
Germany Sembach 139.45 50,900
Germany Stuttgart 138.08 50,400
Germany Vilseck 112.05 40,900
Germany Wahn 115.07 42,000
Germany Wertheim 98.36 35,900
Germany Wiesbaden 153.97 56,200
Germany Wuerzburg 98.36 35,900
Germany Zweibruecken 139.45 50,900
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, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf, and Zweibruecken 110.14 40,200
Ghana Accra 98.63 36,000
Greece Argyroupolis 88.77 32,400
Greece Athens 113.97 41,600
Greece Elefsis 113.97 41,600
Greece Ellinikon 113.97 41,600
Greece Mt. Hortiatis 88.77 32,400
Greece Mt. Parnis 113.97 41,600
Greece Mt. Pateras 113.97 41,600
Greece Nea Makri 113.97 41,600
Greece Perivolaki 88.77 32,400
Greece Piraeus 113.97 41,600
Greece Tanagra 113.97 41,600
Greece Thessaloniki 88.77 32,400
Guatemala Guatemala City 112.05 40,900
Guyana Georgetown 95.89 35,000
Holy See, The Holy See, The 154.79 56,500
Hungary Budapest 89.04 32,500
Hungary Papá 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 134.52 49,100
Ireland Shannon Area 106.30 38,800
Israel Tel Aviv 139.18 50,800
Italy Catania 90.41 33,000
Italy Genoa 114.52 41,800
Italy Gioia Tauro 85.48 31,200
Italy La Spezia 110.68 40,400
Italy Leghorn 96.99 35,400
Italy Milan 231.23 84,400
Italy Naples 146.85 53,600
Italy Parma 117.53 42,900
Italy Pisa 96.99 35,400
Italy Pordenone-Aviano 117.53 42,900
Italy Rome 154.79 56,500
Italy Sardinia 79.45 29,000
Italy Sigonella 90.41 33,000
Italy Turin 115.62 42,200
Italy Vicenza 118.63 43,300
Italy All cities other than Avellino, Brindisi, Catania, Florence, Gaeta, Genoa, Gioia Tauro, La Spezia, Leghorn, Milan, Mount Vergine, Naples, Nettuno, Parma, Pisa, Pordenone-Aviano, Rome, Sardinia, Sigonella, Turin, Verona, and Vicenza. 92.88 33,900
Jamaica Kingston 112.88 41,200
Japan Akashi 108.22 39,500
Japan Akizuki 95.34 34,800
Japan Atsugi 136.71 49,900
Japan Camp Zama 136.71 49,900
Japan Chiba-Ken 136.71 49,900
Japan Fussa 136.71 49,900
Japan Gifu 203.56 74,300
Japan Gotemba 103.29 37,700
Japan Haneda 136.71 49,900
Japan Iwakuni 97.81 35,700
Japan Kanagawa-Ken 136.71 49,900
Japan Komaki 203.56 74,300
Japan Machidi-Shi 136.71 49,900
Japan Misawa 118.90 43,400
Japan Nagoya 203.56 74,300
Japan Okinawa Prefecture 188.49 68,800
Japan Osaka-Kobe 248.39 90,664
Japan Sagamihara 136.71 49,900
Japan Saitama-Ken 136.71 49,900
Japan Sasebo 112.05 40,900
Japan Tachikawa 136.71 49,900
Japan Tokyo 324.66 118,500
Japan Tokyo-to 136.71 49,900
Japan Yokohama 178.36 65,100
Japan Yokosuka 163.01 59,500
Japan Yokota 136.71 49,900
Kazakhstan Almaty 131.51 48,000
Korea Camp Carroll 80.82 29,500
Korea Camp Colbern 148.49 54,200
Korea Camp Market 148.49 54,200
Korea Camp Mercer 148.49 54,200
Korea K-16 148.49 54,200
Korea Kimhae 76.44 27,900
Korea Kimpo Airfield 148.49 54,200
Korea Munsan 88.22 32,200
Korea Osan AB 93.97 34,300
Korea Pusan 76.44 27,900
Korea Pyongtaek 89.32 32,600
Korea Seoul 148.49 54,200
Korea Suwon 148.49 54,200
Korea Taegu 89.04 32,500
Korea Tongduchon 79.18 28,900
Korea Uijongbu 85.21 31,100
Korea Waegwan 80.82 29,500
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 83.01 30,300
Kuwait Kuwait City 176.44 64,400
Kuwait All cities other than Kuwait City 158.08 57,700
Luxembourg Luxembourg 126.85 46,300
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 All cities in Malta 131.51 48,000
Mexico Mazatlan 84.93 31,000
Mexico Merida 103.84 37,900
Mexico Mexico City 134.52 49,100
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, Reynosa, 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 109.04 39,800
Netherlands Eygelshoven 109.04 39,800
Netherlands Hague, The 184.38 67,300
Netherlands Heerlen 109.04 39,800
Netherlands Hoensbroek 109.04 39,800
Netherlands Hulsberg 109.04 39,800
Netherlands Kerkrade 109.04 39,800
Netherlands Landgraaf 109.04 39,800
Netherlands Maastricht 109.04 39,800
Netherlands Papendrecht 110.96 40,500
Netherlands Rotterdam 110.96 40,500
Netherlands Schaesburg 109.04 39,800
Netherlands Schinnen 109.04 39,800
Netherlands Schiphol 144.93 52,900
Netherlands Ypenburg 184.38 67,300
Netherlands All locations other than Amsterdam, Aruba, Brunssum, Coevorden, Eygelshoven, The Hague, Heerlen, Hoensbroek, Hulsberg, Kerkrade, Landgraaf, Maastricht, Margraten, Papendrecht, Rotterdam, Schaesburg, Schinnen, Schiphol, and Ypenburg. 111.23 40,600
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
Nigeria Abuja 98.63 36,000
Norway Oslo 135.89 49,600
Norway Stavanger 115.62 42,200
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 All cities other than Krakow and Warsaw 80.55 29,400
Portugal Alverca 141.64 51,700
Portugal Lisbon 141.64 51,700
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 183.56 67,000
South Africa Pretoria 107.67 39,300
Spain Barcelona 111.23 40,600
Spain Madrid 188.77 68,900
Spain Rota 112.05 40,900
Spain Valencia 108.49 39,600
Spain All cities other than Barcelona, Madrid, Rota, and Valencia 81.92 29,900
Suriname Paramaribo 90.41 33,000
Switzerland Bern 173.15 63,200
Switzerland Geneva 238.90 87,200
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
Tanzania Dar Es Salaam 120.55 44,000
Thailand Bangkok 161.64 59,000
Turkey Ankara 92.33 33,700
Turkey Elmadag 92.33 33,700
Turkey Izmir-Cigli 86.58 31,600
Turkey Manzarali 92.33 33,700
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 Brookwood 116.44 42,500
United Kingdom Cambridge 117.81 43,000
United Kingdom Caversham 202.19 73,800
United Kingdom Cheltenham 143.29 52,300
United Kingdom Croughton 117.53 42,900
United Kingdom Fairford 116.99 42,700
United Kingdom Farnborough 149.86 54,700
United Kingdom Felixstowe 113.42 41,400
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 116.99 42,700
United Kingdom Lakenheath 146.03 53,300
United Kingdom Liverpool 106.30 38,800
United Kingdom London 228.49 83,400
United Kingdom Loudwater 173.97 63,500
United Kingdom Menwith Hill 127.12 46,400
United Kingdom Mildenhall 146.03 53,300
United Kingdom Oxfordshire 117.53 42,900
United Kingdom Plymouth 117.53 42,900
United Kingdom Portsmouth 117.53 42,900
United Kingdom Reading 170.14 62,100
United Kingdom Rochester 122.19 44,600
United Kingdom Southampton 121.10 44,200
United Kingdom Surrey 132.61 48,402
United Kingdom Waterbeach 119.73 43,700
United Kingdom Wiltshire 113.97 41,600
United Kingdom All cities other than Basingstoke, Bath, Belfast, Birmingham, Bracknell, Bristol, Brookwood, 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 116.44 42,500
Venezuela Caracas 156.16 57,000
Vietnam Hanoi 128.22 46,800
Vietnam Ho Chi Minh City 115.07 42,000

SECTION 4. ELECTION TO APPLY 2011 ADJUSTED LIMITATIONS TO 2010 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 2010” in Notice 2010-27. A qualified individual incurring housing expenses in such a location during 2010 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 2010” in Notice 2010-27 (and as set forth in the Instructions to Form 2555 (2010)).

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 2012 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2011 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, Notice 2008-107, 2008-2 C.B. 1265, and Notice 2010-27, 2010-15 I.R.B. 531.

EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2011. However, as provided in section 4, a taxpayer may elect to apply the 2011 adjusted housing limitations contained in section 3 of this notice to his or her taxable year beginning in 2010.

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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