The previously excluded value of meals and lodging furnished for the convenience of your employer.
You highlighted the wrong word. You should have highlighted
Convenience.
If you are on an oil rig and living in the quarters that are provided on that oil rig the clause you highlighted applies. If you are living in a desert camp out at oil pumping station number 10, the clause that you highlighted applies. If you are living in a villa/apartment in the city that you are domiciled and that villa/apartment is either provided by the employer, or you are reimbursed wholly or partially for that villa/apartment it
IS considered part of your income.
FOREIGN HOUSING EXCLUSION
If your tax home is in a foreign country and you meet either the bona fide residence test or the physical presence test, you may be able to claim an exclusion or a deduction from gross income for a housing amount paid to you. Housing amount is the excess, if any, of your allowable housing expenses for the tax year over a base amount. Allowable housing expenses are the reasonable expenses (such as rent, utilities other than telephone charges, and real and personal property insurance) paid or incurred during the tax year by you, or on your behalf, for your foreign housing and that of your spouse and dependents if they lived with you. You can include the rental value of housing provided by your employer in return for your services. You can also include the allowable housing expenses of a second foreign household for your spouse and dependents if they did not live with you because of dangerous, unhealthy, or otherwise adverse living conditions at your tax home. Housing expenses, for this purpose, do not include the cost of home purchase or other capital items, wages of domestic servants, or deductible interest and taxes.
The base amount for 2006 is $13,184 or $36.12 per day. To figure your base amount if you are a calendar year taxpayer, multiply $36.12 by the number of days in your period of foreign residence or presence, whichever applies, that are within the tax year. Beginning with tax year 2006, the maximum foreign housing exclusion is limited to $11,536 above the base amount.
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