Correct! CX will pay housing allowance on mortgage or lease. For the first 2 years you only receive 50% of the housing allowance (currently 50% is around $31K/month) After 2 years of service or JFO and above you increase to full housing, so around $62K/month.
If you decide to take the cash option ($14K), it all forms part of your taxable income
If the company pays the housing directly it is also taxed, but it is minimal. All it does is increase your taxable income by 10%. ie if you earn $400K, your taxable income will be $440K. It does not make you taxable income increase by your total housing allowance. Then, worst case tax is 16% of that total($440K); but in fact as an SO it will be substantially less than that. Dependant wife and/or children are also tax deductions, (from memory the wife is worth $200K). So if your income is $400K, plus housing ($+40K), minus the wife deduction, taxable income is only around $240K.