Part III - Administrative, Procedural, and Miscellaneous

Determination of housing cost amount eligible for exclusion or deduction for 2013.

Notice 2013-31

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 2013. 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 ($267.40 per day for 2013, or $97,600 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 2013 is $15,616 ($97,600 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 (computed on a daily basis) 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 $29,280 ($97,600 x .30) in 2013. 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, 20082 C.B. 1266, for 2008 and 2009; Notice 2010-27, 2010-1 C.B. 531, for 2009 and 2010;

Notice 2011-8, 2011-1 C.B. 503, for 2010 and 2011; and Notice 2012-19, 2012-1 C.B. 440, for 2012 and 2013 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 2013 The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $29,280) for 2013.

Country Angola Argentina Australia Australia Australia Australia Australia Australia Australia Australia Australia

Location Luanda Buenos Aires Adelaide Brisbane Canberra Darwin, Northern Country Gold Coast Melbourne Oakey Perth Sydney

Limitation on Housing Expenses (daily) 230.14 154.79 96.44 95.34 83.84 83.84 95.34 122.19 95.34 130.68 89.81

Limitation on Housing Expenses (full year ) 84,000 56,500 35,200 34,800 30,600 30,600 34,800 44,600 34,800 47,700 32,782

Australia Austria Bahamas, The Bahamas, The Bahrain Barbados Belgium Belgium Belgium Belgium Belgium Belgium Bermuda BosniaHerzegovina Brazil Brazil Brazil Canada Canada Canada Canada Canada Canada

Toowoomba Vienna Grand Bahama Island Nassau Bahrain Barbados Antwerp Brussels Gosselies Hoogbuul Mons SHAPE/Chievres Bermuda Sarajevo Brasilia Rio de Janeiro Sao Paulo Calgary Dartmouth Edmonton Halifax London, Ontario Montreal

95.34 96.99 84.66 136.16 120.55 103.29 96.16 128.77 115.34 96.16 115.34 115.34 246.58 82.19 126.03 96.16 155.07 129.86 107.95 103.29 107.95 88.22 166.03

34,800 35,400 30,900 49,700 44,000 37,700 35,100 47,000 42,100 35,100 42,100 42,100 90,000 30,000 46,000 35,100 56,600 47,400 39,400 37,700 39,400 32,200 60,600

Canada Canada Canada Canada Canada Canada Cayman Islands Chile China China China Colombia Colombia Costa Rica Denmark Dominican Republic Ecuador Ecuador Estonia France France France France

Ottawa Quebec Toronto Vancouver Victoria Winnipeg Grand Cayman Santiago Beijing Hong Kong Shanghai Bogota All cities other than Bogota San Jose Copenhagen Santo Domingo Guayaquil Quito Tallinn Garches Le Havre Lyon Marseille

148.49 126.03 153.97 136.71 97.53 93.15 131.51 153.70 195.07 313.15 156.17 160.82 135.34 87.67 119.74 124.66 84.38 89.32 127.67 226.03 91.23 127.12 121.92

54,200 46,000 56,200 49,900 35,600 34,000 48,000 56,100 71,200 114,300 57,001 58,700 49,400 32,000 43,704 45,500 30,800 32,600 46,600 82,500 33,300 46,400 44,500

France France France France France Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany

Montpellier Paris Sevres Suresnes Versailles Babenhausen Bad Aibling Bad Nauheim Baumholder Berlin Birkenfeld Boeblingen Bonn Butzbach Cologne Darmstadt Frankfurt am Main Friedberg Garmisch-Partenkirchen Gelnhausen Germersheim Giebelstadt Giessen

102.47 226.03 226.03 226.03 226.03 110.96 94.52 88.77 107.40 135.34 107.40 134.52 115.07 86.58 153.97 110.96 115.62 88.77 102.47 139.73 83.84 95.89 98.63

37,400 82,500 82,500 82,500 82,500 40,500 34,500 32,400 39,200 49,400 39,200 49,100 42,000 31,600 56,200 40,500 42,200 32,400 37,400 51,000 30,600 35,000 36,000

Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany Germany

Grafenwoehr Hanau Hannover Heidelberg Idar-Oberstein Ingolstadt Kaiserslautern, Landkreis Kitzingen Leimen Ludwigsburg Mainz Mannheim Munich Nellingen Neubruecke Ober Ramstadt Oberammergau Pirmasens Rheinau Schwetzingen Seckenheim Sembach Stuttgart

110.41 139.73 82.74 103.56 107.40 156.16 133.70 95.89 103.56 134.52 149.86 103.56 156.16 134.52 107.40 110.96 102.47 133.70 103.56 103.56 103.56 133.70 134.52

40,300 51,000 30,200 37,800 39,200 57,000 48,800 35,000 37,800 49,100 54,700 37,800 57,000 49,100 39,200 40,500 37,400 48,800 37,800 37,800 37,800 48,800 49,100

Germany Germany Germany Germany Germany Germany

Vilseck Wahn Wertheim Wiesbaden Wuerzburg Zweibrueken

110.41 115.07 95.89 149.86 95.89 133.70

40,300 42,000 35,000 54,700 35,000 48,800

Germany

Ghana Greece

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, OsterholzScharmbeck, Pirmasens, Rheinau, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf and Zweibrueken Accra Argyroupolis

108.77

39,700

98.63 86.30

36,000 31,500

Greece Greece Greece Greece Greece Greece Greece Greece Greece Greece Greece Guatemala Guyana Holy See, The Hungary Hungary India India Indonesia Ireland Ireland Israel Italy

Athens Elefsis Ellinikon Mt. Hortiatis Mt. Parnis Mt. Pateras Nea Makri Perivolaki Piraeus Tanagra Thessaloniki Guatemala City Georgetown Holy See, The Budapest Pap Mumbai New Delhi Jakarta Dublin Shannon Area Tel Aviv Catania

110.68 110.68 110.68 86.30 110.68 110.68 110.68 86.30 110.68 110.68 86.30 113.70 95.89 150.41 89.04 121.92 186.08 82.88 103.50 130.96 103.56 139.18 88.22

40,400 40,400 40,400 31,500 40,400 40,400 40,400 31,500 40,400 40,400 31,500 41,500 35,000 54,900 32,500 44,500 67,920 30,252 37,776 47,800 37,800 50,800 32,200

Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy

Genoa Gioia Tauro La Spezia Leghorn Milan Naples Parma Pisa Pordenone-Aviano Rome Sigonella Turin Vicenza 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. Kingston Akashi Akizuki Atsugi Camp Zama

114.52 85.48 110.68 94.25 224.93 143.01 114.25 94.25 114.25 150.41 88.22 112.60 115.34 92.05

41,800 31,200 40,400 34,400 82,100 52,200 41,700 34,400 41,700 54,900 32,200 41,100 42,100 33,600

Jamaica Japan Japan Japan Japan

112.88 107.12 94.25 139.73 139.73

41,200 39,100 34,400 51,000 51,000

Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Kazakhstan

Chiba-Ken Fussa Gifu Gotemba Haneda Iwakuni Kanagawa-Ken Komaki Machidi-Shi Misawa Nagoya Okinawa Prefecture Osaka-Kobe Sagamihara Saitama-Ken Sasebo Tachikawa Tokyo Tokyo-to Yokohama Yokosuka Yokota Almaty

150.96 139.73 203.56 102.19 139.73 107.95 139.73 203.56 139.73 116.16 203.56 188.22 248.39 139.73 139.73 115.89 139.73 320.82 139.73 175.89 163.01 139.73 131.51

55,100 51,000 74,300 37,300 51,000 39,400 51,000 74,300 51,000 42,400 74,300 68,700 90,664 51,000 51,000 42,300 51,000 117,100 51,000 64,200 59,500 51,000 48,000

Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea

Ammo Depot #9 Camp Carroll Camp Colbern Camp Market Camp Mercer Chinhae K-16 Kimhae Kimpo Airfield Munsan Osan AB Pusan Pyongtaek Seoul Suwon Taegu Tongduchon Uijongbu Waegwan

81.10 88.77 153.42 153.42 153.42 82.19 153.42 83.84 153.42 94.25 96.71 83.84 96.16 153.42 153.42 92.05 87.40 90.96 88.77

29,600 32,400 56,000 56,000 56,000 30,000 56,000 30,600 56,000 34,400 35,300 30,600 35,100 56,000 56,000 33,600 31,900 33,200 32,400

Korea

Kuwait Kuwait Luxembourg Macedonia Malaysia Malaysia Mexico Mexico Mexico Mexico Mexico Mexico

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 Kuwait City All cities other than Kuwait City Luxembourg Skopje Kuala Lumpur All cities other than Kuala Lumpur Malta Mazatlan Merida Mexico City Monterrey 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 Maputo Windhoek

88.77

32,400

176.44 158.08 123.56 96.99 126.58 92.33 138.36 84.93 103.84 131.23 90.96 107.95

64,400 57,700 45,100 35,400 46,200 33,700 50,500 31,000 37,900 47,900 33,200 39,400

Mozambique Namibia

108.22 87.95

39,500 32,100

Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands

Amsterdam Aruba Brunssum Eygelshoven Hague, The Heerlen Hoensbroek Hulsberg Kerkrade Landgraaf Maastricht Papendrecht Rotterdam Schaesburg Schinnen Schiphol Ypenburg 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.

144.93 98.63 106.30 106.30 179.45 106.30 106.30 106.30 106.30 106.30 106.30 108.22 108.22 106.30 106.30 144.93 179.45 108.22

52,900 36,000 38,800 38,800 65,500 38,800 38,800 38,800 38,800 38,800 38,800 39,500 39,500 38,800 38,800 52,900 65,500 39,500

Netherlands Antilles New Zealand New Zealand New Zealand Nicaragua Nigeria Norway Norway Norway Panama Peru Philippines Philippines Poland Portugal Portugal Qatar Qatar Russia Russia Russia Russia Russia

Curacao Auckland Christchurch Wellington Managua Abuja Oslo Stavanger All cities other than Oslo and Stavanger. Panama City Lima Cavite Manila Poland Alverca Lisbon Doha All cities other than Doha Moscow Saint Petersburg Sakhalin Island Vladivostok Yekaterinburg

125.48 97.81 87.95 92.60 87.12 98.63 147.40 125.21 103.29 97.26 107.12 106.85 106.85 80.55 137.81 137.81 99.35 88.77 295.89 164.38 212.33 212.33 129.86

45,800 35,700 32,100 33,800 31,800 36,000 53,800 45,700 37,700 35,500 39,100 39,000 39,000 29,400 50,300 50,300 36,264 32,400 108,000 60,000 77,500 77,500 47,400

Rwanda Saudi Arabia Saudi Arabia Singapore South Africa Spain Spain Spain Spain Suriname Switzerland Switzerland Switzerland Switzerland Taiwan Tanzania Thailand Trinidad and Tobago Turkey Turkey Ukraine United Arab Emirates United Arab Emirates

Kigali Jeddah Riyadh Singapore Pretoria Barcelona Madrid Rota Valencia Paramaribo Bern Geneva Zurich All cities other than Bern, Geneva and Zurich Taipei Dar Es Salaam Bangkok Port of Spain Izmir-Cigli Yamanlar Kiev Abu Dhabi Dubai

86.30 84.02 109.59 246.03 107.67 111.23 183.56 112.05 105.48 90.41 193.70 269.32 107.45 90.14 126.54 120.55 161.64 149.32 86.58 86.58 197.26 136.13 156.64

31,500 30,667 40,000 89,800 39,300 40,600 67,000 40,900 38,500 33,000 70,700 98,300 39,219 32,900 46,188 44,000 59,000 54,500 31,600 31,600 72,000 49,687 57,174

United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom

Basingstoke Bath Bracknell Bristol Brookwood Cambridge Caversham Cheltenham Croughton Fairford Farnborough Felixstowe Gibraltar Harrogate High Wycombe Kemble Lakenheath Liverpool London Loudwater Menwith Hill Mildenhall Oxfordshire

112.60 112.33 170.14 106.03 120.55 117.81 202.19 146.03 122.74 122.74 149.86 115.62 122.24 129.04 170.14 122.74 152.05 106.30 241.64 173.97 129.04 152.05 119.45

41,099 41,000 62,100 38,700 44,000 43,000 73,800 53,300 44,800 44,800 54,700 42,200 44,616 47,100 62,100 44,800 55,500 38,800 88,200 63,500 47,100 55,500 43,600

United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom

Plymouth Portsmouth Reading Rochester Samlesbury Southampton Surrey Waterbeach Wiltshire 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, Samlesbury, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire. Caracas Hanoi

119.45 119.45 170.14 124.66 120.55 121.10 132.61 124.11 113.97 120.55

43,600 43,600 62,100 45,500 44,000 44,200 48,402 45,300 41,600 44,000

Venezuela Vietnam

156.16 128.22

57,000 46,800

Vietnam

Ho Chi Minh City

115.07

42,000

SECTION 4. ELECTION TO APPLY 2013 ADJUSTED LIMITATIONS TO 2012 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 2012" in Notice 2012-19. A qualified individual incurring housing expenses in such a location during 2012 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 2012" in Notice 2012-19 (and as set forth in the Instructions to Form 2555 (2012)). The IRS and the Treasury Department 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 2014 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2013 taxable year.

SECTION 5. EFFECT ON OTHER DOCUMENTS This notice supersedes Notice 2006-87, 2006-2 C.B. 766; Notice 2007-25, 20071 C.B. 760; Notice 2007-77; 2007-2 C.B. 735; Notice 2008-107, 2008-2 C.B. 1266; Notice 2010-27, 2010-1 C.B. 531; Notice 2011-8, 2011-1 C.B. 503; and Notice 2012-19,

2012-1 C.B. 440.

SECTION 6. EFFECTIVE DATE This notice is effective for taxable years beginning on or after January 1, 2013. However, as provided in section 4, a taxpayer may elect to apply the 2013 adjusted housing limitations contained in section 3 of this notice to his or her taxable year beginning in 2012.

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).