# Foreign Housing Exclusion



## Zendo (Apr 25, 2013)

I have a question regarding the FHE on the Form 2555 Part VI Lines 28 to 36.

It's more or less straight forward, but I find it just a little bit fuzzy. Here's why:
Line 28 "Qualified housing expenses for the tax year"
Line 29b "Enter limit on housing expenses"

The official limit on housing expenses for the area Switzerland where I live is 32'900.

The instructions for 2555 Part VI Line 28 reads "Enter the total reasonable expenses paid or incurred during the tax year by you ..." I interpret this as giving the filer a certain amount of leeway up to but not exceeding the limit for the area where he/she lives. It is not asking for proof.

As far as my situation is concerned and given the actual living costs related to this item here in Switzerland, taking into account the weak dollar against the strong Frank, I found it reasonable to enter the limit on line 28, which is 32,900. 

Lines 31 to 36 are pretty straightforward: qualifying period (I can claim 365 days), base amount, subtraction of line 32 from line 30, employer-provided amount. No problem.

Although there dosen't seem to be anything to the contrary and, if I've been reading the instruction correctly, I would simply like to know if a flag goes up at the IRS at line 28 when the limit amount is entered.

Any thoughts or comments on how this works?


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## BBCWatcher (Dec 28, 2012)

Read on to the second and third paragraphs in the instructions for Line 28. You don't just guess. Be prepared to substantiate your Line 28 figure with receipts.

The IRS's local exceptional limits tend to be fairly generous, so yes, I think you need to be careful that you have receipts if you're putting a high number there relative to the limit.


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## Bevdeforges (Nov 16, 2007)

At a bare minimum, I would run up a schedule to support whatever number you're posting for your "housing expenses" - breaking things down into the appropriate categories (i.e. rent, charges, whatever else). List the amounts in CHF (or whatever you pay in) and show the exchange rate you used to get the US$ figure you're claiming.

It's possible that they'll never bother you about it. But if they do, you will be very glad that you have those figures to hand. (It's also a "sanity check" on what you're claiming.)
Cheers,
Bev


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## Zendo (Apr 25, 2013)

Bevdeforges said:


> At a bare minimum, I would run up a schedule to support whatever number you're posting for your "housing expenses" - breaking things down into the appropriate categories (i.e. rent, charges, whatever else). List the amounts in CHF (or whatever you pay in) and show the exchange rate you used to get the US$ figure you're claiming.
> 
> It's possible that they'll never bother you about it. But if they do, you will be very glad that you have those figures to hand. (It's also a "sanity check" on what you're claiming.)
> Cheers,
> Bev


Thank you Bev.

It's the "whatever else" I'm thinking about. Apart from rent, utilities and insurance I have no idea. Am I missing something?

On another note. In Switzerland we can deduct the cost of commuting to work from our taxes (whether by train or car). Is this possible in addition to the FEIE?


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## Bevdeforges (Nov 16, 2007)

Unfortunately, one of the great principles of US taxation is that you get NO deduction for commuting costs from your home to your regular place of work.

However, check the instructions for the form 2555 - there are a few things you can throw into the Housing Exclusion pot. It's been a long time since I last was eligible for that and I'm forgotten the details. But I remember being kind of surprised at some of the "side things" you may be able to include.
Cheers,
Bev


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## Zendo (Apr 25, 2013)

Bevdeforges said:


> Unfortunately, one of the great principles of US taxation is that you get NO deduction for commuting costs from your home to your regular place of work.
> 
> However, check the instructions for the form 2555 - there are a few things you can throw into the Housing Exclusion pot. It's been a long time since I last was eligible for that and I'm forgotten the details. But I remember being kind of surprised at some of the "side things" you may be able to include.
> Cheers,
> Bev


Thank you for the quick reply. Please see my thread on f2106.


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## BBCWatcher (Dec 28, 2012)

The second and third paragraphs of the instructions for Form 2555 Line 28 list what you can and cannot include.


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