In the US the Internal Revenue Service (IRS) has issued Notice 2014-29. The Notice sets out the inflation-adjusted limitations in respect of foreign housing expenses for tax year 2014. The figures included in the Notice show that Hong Kong, Moscow, and Geneva are considered to be the most expensive foreign cities to live in. The Notice will be published officially in the Internal Revenue Bulletin of April 28 2014. Guidance is also included on how an individual can elect to exclude some housing costs from gross income in the 2014 tax year.
By the use of a particular formula, the US tax code sets a limitation on the allowable housing expenses which cannot exceed 30 percent of the excludable amount applicable for each year. This amount is USD99,200 for 2014.
For people living in places where the amount has increased as compared to 2013, the Notice also permits taxpayers who incurred housing expenses in 2013 to elect for the 2014 amount to also apply to 2013.
