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

2013–21 I.R.B. 1099 May 20, 2013

2008 and 2009; Notice 2010–27, 2010–15 I.R.B. 531, for 2009 and 2010; Notice 2011–8, 2011–8 I.R.B. 503, for 2010 and 2011; and Notice 2012–19, 2012–10 I.R.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.