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Old 8th Sep 2008, 13:39
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GAGing in Bahrain
 
Join Date: Feb 2002
Location: BRFC, Dilmun Club, Riffa Golf Course
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The $87,500 limit is only for foreign earned "income", which typically means salary, bonus, etc... Housing exemption is separate and location based. Transportation is not exempt unless you count it as a moving expense.
See IRS Publication 54 for more details. You can download Pub 54 directly from the IRS website, or better yet Google "IRS Pub 54".
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