Internal Revenue Bulletin:  2012-10 

March 5, 2012 

Notice 2012-19

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2012


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 2012. 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 ($259.84 per day for 2012, or $95,100 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 2012 is $15,216 ($95,100 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 $28,530 ($95,100 x .30) in 2012.

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, Notice 2010-27, 2010-15 I.R.B. 531, for 2009 and 2010, and Notice 2011-8, 2011-8 I.R.B. 503, for 2010 and 2011 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 2012

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $28,530) for 2012.

Country Location Limitation on Housing Expenses (daily) Limitation on Housing Expenses (full year)
Angola Luanda 229.51 84,000
Argentina Buenos Aires 154.37 56,500
Australia Adelaide 89.62 32,800
Australia Brisbane 88.52 32,400
Australia Darwin, Northern Country 83.61 30,600
Australia Gold Coast 88.52 32,400
Australia Melbourne 113.39 41,500
Australia Oakey 88.52 32,400
Australia Perth 121.31 44,400
Australia Sydney 89.57 32,782
Australia Toowoomba 88.52 32,400
Austria Vienna 96.72 35,400
Bahamas, The Nassau 135.79 49,700
Bahrain Bahrain 120.22 44,000
Barbados Barbados 103.01 37,700
Belgium Antwerp 98.63 36,100
Belgium Brussels 130.33 47,700
Belgium Gosselies 118.31 43,300
Belgium Hoogbuul 98.63 36,100
Belgium Mons 118.31 43,300
Belgium SHAPE/Chievres 118.31 43,300
Bermuda Bermuda 245.90 90,000
Bosnia-Herzegovina Sarajevo 83.61 30,600
Brazil Brasilia 144.26 52,800
Brazil Rio de Janeiro 95.90 35,100
Brazil Sao Paulo 154.64 56,600
Canada Calgary 109.02 39,900
Canada Dartmouth 93.44 34,200
Canada Edmonton 96.99 35,500
Canada Halifax 93.44 34,200
Canada London, Ontario 82.79 30,300
Canada Montreal 154.37 56,500
Canada Ottawa 136.07 49,800
Canada Toronto 134.70 49,300
Canada Vancouver 128.42 47,000
Canada Victoria 91.53 33,500
Canada Winnipeg 90.16 33,000
Cayman Islands Grand Cayman 131.15 48,000
Chile Santiago 140.16 51,300
China Beijing 194.54 71,200
China Hong Kong 312.30 114,300
China Shanghai 155.74 57,001
Colombia Bogota 147.81 54,100
Colombia All cities other than Bogota 134.97 49,400
Costa Rica San Jose 87.43 32,000
Denmark Copenhagen 119.41 43,704
Dominican Republic Santo Domingo 124.32 45,500
Ecuador Guayaquil 84.15 30,800
Ecuador Quito 88.52 32,400
Estonia Tallinn 127.32 46,600
France Garches 231.69 84,800
France Le Havre 96.17 35,200
France Lyon 133.88 49,000
France Marseille 124.86 45,700
France Montpellier 107.92 39,500
France Paris 231.69 84,800
France Sevres 231.69 84,800
France Suresnes 231.69 84,800
France Versailles 231.69 84,800
Germany Babenhausen 113.66 41,600
Germany Bad Aibling 96.99 35,500
Germany Bad Nauheim 90.98 33,300
Germany Baumholder 108.47 39,700
Germany Berlin 138.80 50,800
Germany Birkenfeld 108.47 39,700
Germany Boeblingen 137.70 50,400
Germany Bonn 114.75 42,000
Germany Butzbach 88.80 32,500
Germany Cologne 153.55 56,200
Germany Darmstadt 113.66 41,600
Germany Frankfurt am Main 118.58 43,400
Germany Friedberg 90.98 33,300
Germany Garmisch-Partenkirchen 103.55 37,900
Germany Gelnhausen 143.17 52,400
Germany Germersheim 85.79 31,400
Germany Giebelstadt 98.09 35,900
Germany Giessen 98.36 36,000
Germany Grafenwoehr 111.75 40,900
Germany Hanau 143.17 52,400
Germany Hannover 84.70 31,000
Germany Heidelberg 107.65 39,400
Germany Idar-Oberstein 108.47 39,700
Germany Ingolstadt 160.11 58,600
Germany Kaiserslautern, Landkreis 139.07 50,900
Germany Kitzingen 98.09 35,900
Germany Leimen 107.65 39,400
Germany Ludwigsburg 137.70 50,400
Germany Mainz 153.55 56,200
Germany Mannheim 107.65 39,400
Germany Munich 160.11 58,600
Germany Nellingen 137.70 50,400
Germany Neubruecke 108.47 39,700
Germany Ober Ramstadt 113.66 41,600
Germany Oberammergau 103.55 37,900
Germany Pirmasens 139.07 50,900
Germany Rheinau 107.65 39,400
Germany Schwetzingen 107.65 39,400
Germany Seckenheim 107.65 39,400
Germany Sembach 139.07 50,900
Germany Stuttgart 137.70 50,400
Germany Vilseck 111.75 40,900
Germany Wahn 114.75 42,000
Germany Wertheim 98.09 35,900
Germany Wiesbaden 153.55 56,200
Germany Wuerzburg 98.09 35,900
Germany Zweibruecken 139.07 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 110.11 40,300
Ghana Accra 98.36 36,000
Greece Argyroupolis 88.52 32,400
Greece Athens 113.66 41,600
Greece Elefsis 113.66 41,600
Greece Ellinikon 113.66 41,600
Greece Mt. Hortiatis 88.52 32,400
Greece Mt. Parnis 113.66 41,600
Greece Mt. Pateras 113.66 41,600
Greece Nea Makri 113.66 41,600
Greece Perivolaki 88.52 32,400
Greece Piraeus 113.66 41,600
Greece Tanagra 113.66 41,600
Greece Thessaloniki 88.52 32,400
Guatemala Guatemala City 115.03 42,100
Guyana Georgetown 95.63 35,000
Holy See, The Holy See, The 154.37 56,500
Hungary Budapest 88.80 32,500
Hungary Papá 121.58 44,500
India Mumbai 185.57 67,920
India New Delhi 82.66 30,252
Indonesia Jakarta 103.21 37,776
Ireland Dublin 134.15 49,100
Ireland Shannon Area 106.01 38,800
Israel Tel Aviv 138.80 50,800
Italy Catania 90.16 33,000
Italy Genoa 114.21 41,800
Italy Gioia Tauro 85.25 31,200
Italy La Spezia 110.38 40,400
Italy Leghorn 96.72 35,400
Italy Milan 230.60 84,400
Italy Naples 146.45 53,600
Italy Parma 117.21 42,900
Italy Pisa 96.72 35,400
Italy Pordenone-Aviano 117.21 42,900
Italy Rome 154.37 56,500
Italy Sardinia 79.23 29,000
Italy Sigonella 90.16 33,000
Italy Turin 115.30 42,200
Italy Vicenza 118.31 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 92.62 33,900
Jamaica Kingston 112.57 41,200
Japan Akashi 116.67 42,700
Japan Akizuki 102.73 37,600
Japan Atsugi 150.55 55,100
Japan Camp Zama 150.55 55,100
Japan Chiba-Ken 150.55 55,100
Japan Fussa 150.55 55,100
Japan Gifu 203.01 74,300
Japan Gotemba 111.48 40,800
Japan Haneda 150.55 55,100
Japan Iwakuni 117.76 43,100
Japan Kanagawa-Ken 150.55 55,100
Japan Komaki 203.01 74,300
Japan Machidi-Shi 150.55 55,100
Japan Misawa 126.50 46,300
Japan Nagoya 203.01 74,300
Japan Okinawa Prefecture 202.73 74,200
Japan Osaka-Kobe 247.72 90,664
Japan Sagamihara 150.55 55,100
Japan Saitama-Ken 150.55 55,100
Japan Sasebo 126.23 46,200
Japan Tachikawa 150.55 55,100
Japan Tokyo 349.73 128,000
Japan Tokyo-to 150.55 55,100
Japan Yokohama 189.34 69,300
Japan Yokosuka 175.68 64,300
Japan Yokota 150.55 55,100
Kazakhstan Almaty 131.15 48,000
Korea Camp Carroll 83.06 30,400
Korea Camp Colbern 143.44 52,500
Korea Camp Market 143.44 52,500
Korea Camp Mercer 143.44 52,500
Korea K-16 143.44 52,500
Korea Kimhae 78.14 28,600
Korea Kimpo Airfield 143.44 52,500
Korea Munsan 87.98 32,200
Korea Osan AB 90.71 33,200
Korea Pusan 78.14 28,600
Korea Pyongtaek 89.07 32,600
Korea Seoul 143.44 52,500
Korea Suwon 143.44 52,500
Korea Taegu 86.07 31,500
Korea Tongduchon 78.96 28,900
Korea Uijongbu 84.97 31,100
Korea Waegwan 83.06 30,400
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 82.79 30,300
Kuwait Kuwait City 175.96 64,400
Kuwait All cities other than Kuwait City 157.65 57,700
Luxembourg Luxembourg 126.50 46,300
Macedonia Skopje 96.72 35,400
Malaysia Kuala Lumpur 126.23 46,200
Malaysia All cities other than Kuala Lumpur 92.08 33,700
Malta Malta 137.98 50,500
Mexico Mazatlan 84.70 31,000
Mexico Merida 103.55 37,900
Mexico Mexico City 118.58 43,400
Mexico Monterrey 90.71 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 107.65 39,400
Mozambique Maputo 107.92 39,500
Namibia Windhoek 87.70 32,100
Netherlands Amsterdam 144.54 52,900
Netherlands Aruba 98.36 36,000
Netherlands Brunssum 108.74 39,800
Netherlands Eygelshoven 108.74 39,800
Netherlands Hague, The 183.88 67,300
Netherlands Heerlen 108.74 39,800
Netherlands Hoensbroek 108.74 39,800
Netherlands Hulsberg 108.74 39,800
Netherlands Kerkrade 108.74 39,800
Netherlands Landgraaf 108.74 39,800
Netherlands Maastricht 108.74 39,800
Netherlands Papendrecht 110.93 40,600
Netherlands Rotterdam 110.93 40,600
Netherlands Schaesburg 108.74 39,800
Netherlands Schinnen 108.74 39,800
Netherlands Schiphol 144.54 52,900
Netherlands Ypenburg 183.88 67,300
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 110.93 40,600
Netherlands Antilles Curacao 125.14 45,800
New Zealand Auckland 97.54 35,700
New Zealand Wellington 92.35 33,800
Nicaragua Managua 86.89 31,800
Nigeria Abuja 98.36 36,000
Norway Oslo 141.26 51,700
Norway Stavanger 119.95 43,900
Norway All cities other than Oslo and Stavanger. 103.01 37,700
Panama Panama City 96.99 35,500
Philippines Cavite 106.56 39,000
Philippines Manila 106.56 39,000
Poland Poland 80.33 29,400
Portugal Alverca 141.26 51,700
Portugal Lisbon 141.26 51,700
Qatar Doha 99.08 36,264
Qatar All cities other than Doha 88.52 32,400
Russia Moscow 295.08 108,000
Russia Saint Petersburg 163.93 60,000
Russia Sakhalin Island 211.75 77,500
Russia Vladivostok 211.75 77,500
Russia Yekaterinburg 129.51 47,400
Rwanda Kigali 86.07 31,500
Saudi Arabia Jeddah 83.79 30,667
Saudi Arabia Riyadh 109.29 40,000
Singapore Singapore 184.43 67,500
South Africa Pretoria 107.38 39,300
Spain Barcelona 110.93 40,600
Spain Madrid 188.25 68,900
Spain Rota 113.39 41,500
Spain Valencia 108.20 39,600
Spain All cities other than Barcelona, Madrid, Rota, Seville, Seville Province, and Valencia 81.69 29,900
Suriname Paramaribo 90.16 33,000
Switzerland Bern 181.69 66,500
Switzerland Geneva 257.10 94,100
Switzerland Zurich 107.16 39,219
Switzerland All cities other than Bern, Geneva, and Zurich 89.89 32,900
Taiwan Taipei 126.20 46,188
Tanzania Dar Es Salaam 120.22 44,000
Thailand Bangkok 161.20 59,000
Trinidad and Tobago Port of Spain 148.91 54,500
Turkey Izmir-Cigli 86.34 31,600
Turkey Yamanlar 86.34 31,600
Ukraine Kiev 196.72 72,000
United Arab Emirates Abu Dhabi 135.76 49,687
United Arab Emirates Dubai 156.21 57,174
United Kingdom Basingstoke 112.29 41,099
United Kingdom Bath 112.02 41,000
United Kingdom Bracknell 169.67 62,100
United Kingdom Bristol 105.74 38,700
United Kingdom Brookwood 116.12 42,500
United Kingdom Cambridge 117.49 43,000
United Kingdom Caversham 201.64 73,800
United Kingdom Cheltenham 140.98 51,600
United Kingdom Croughton 117.21 42,900
United Kingdom Fairford 116.94 42,800
United Kingdom Farnborough 149.45 54,700
United Kingdom Felixstowe 111.75 40,900
United Kingdom Gibraltar 121.90 44,616
United Kingdom Harrogate 123.50 45,200
United Kingdom High Wycombe 169.67 62,100
United Kingdom Kemble 116.94 42,800
United Kingdom Lakenheath 145.90 53,400
United Kingdom Liverpool 106.01 38,800
United Kingdom London 228.42 83,600
United Kingdom Loudwater 173.50 63,500
United Kingdom Menwith Hill 123.50 45,200
United Kingdom Mildenhall 145.90 53,400
United Kingdom Oxfordshire 115.85 42,400
United Kingdom Plymouth 115.85 42,400
United Kingdom Portsmouth 115.85 42,400
United Kingdom Reading 169.67 62,100
United Kingdom Rochester 120.22 44,000
United Kingdom Southampton 120.77 44,200
United Kingdom Surrey 132.25 48,402
United Kingdom Waterbeach 119.67 43,800
United Kingdom Wiltshire 113.66 41,600
United Kingdom All cities other than Basingstoke, Bath, Belfast, Birmingham, Bracknell, Bristol, Brookwood, Brough, 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 116.12 42,500
Venezuela Caracas 155.74 57,000
Vietnam Hanoi 127.87 46,800
Vietnam Ho Chi Minh City 114.75 42,000

SECTION 4. ELECTION TO APPLY 2012 ADJUSTED LIMITATIONS TO 2011 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 2011” in Notice 2011-8. A qualified individual incurring housing expenses in such a location during 2011 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 2011” in Notice 2011-8 (and as set forth in the Instructions to Form 2555 (2011)).

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 2013 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2012 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. 1266, Notice 2010-27, 2010-15 I.R.B. 531, and Notice 2011-8, 2011-8 I.R.B. 503.

EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2012. However, as provided in section 4, a taxpayer may elect to apply the 2012 adjusted housing limitations contained in section 3 of this notice to his or her taxable year beginning in 2011.

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).


More Internal Revenue Bulletins