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As US a person - your husband are required to report all income worldwide on his (or your joint) tax return.
The value of apartment is generally considered part of his compensation and should be included into taxable income.
His tax liability would be different if he was an employee or a self-employed contractor.
As an US citizen living abroad - you may claim a foreign earned income exclusion.
The person may qualify for the foreign earned income exclusion - he/she should: -- Work and reside outside the United States for at least 330 days during the year, or -- Meet either the Bona Fide or Physical Presence tests.If the person qualifies, he/she may exclude up to $91,400 (2009 in foreign wages -- plus housing allowances (limited to 30% of the earned income exclusion).
To receive that exclusion - the taxpayer should file either form 2555 or 2555EZ.
Here are forms you likely need:
Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable. For instance dividends, investment income, etc - are not excludable.
If the same income is taxable in Australia and in US - on your US tax return - you may claim a credit for taxes paid abroad - that is besides tax treaty - so you will avoid double taxation.
To determine the amount of credit - you should use the form 1116 and attach it to your tax return. - http://www.irs.gov/pub/irs-pdf/f1116.pdf
Here are instructions - http://www.irs.gov/pub/irs-pdf/i1116.pdf
As your husband was outside the US for six months - he would not qualify for a foreign earned income exclusion.
However - he does qualify to deduct travel expenses - including per diem - http://aoprals.state.gov/web920/per_diem_action.asp?MenuHide=1&CountryCode=1154
Let me know if you need any help.