Hello again,does that mean if my earnings are a salary from a corporation, that the housing expense will be”exclusion” instead of a “deduction”.Yes it does. As an employee you would only be allowed the exclusion amount.If you are married and you and your spouse each qualifies under one of the tests. If you and your spouse live apart and maintain separate households, you both may be able to claim the foreign housing exclusion or the foreign housing deduction.
If you and your spouse lived in the same foreign household and file a joint return, you must figure your housing amounts jointly. If you file separate returns, only one spouse can claim the housing exclusion or deduction.