Tax Treatment Extension Act of 1977

(Conference report filed in House, H. Rept. 95-1798)

Foreign Earned Income Act - Amends the Internal Revenue Code to substitute itemized deductions for the current flat rates which are excluded from the gross income of United States citizens or residents residing in a foreign country. Specifies deductions for qualified cost-of-living differential, housing expenses, schooling expenses, home leave travel expenses, residing in a hardship area, and maintaining a separate household for spouse and dependents because of adverse living conditions at the tax home.

Provides that a deduction for a foreign job-related move may be made for temporary arrangements of up to 90 days with a ceiling of $4,500, and may include an allowance for certain storage fees. Allows a deduction for qualified retiree or survivor moving expenses.

Allows United States citizens or residents residing in a foreign country in substandard housing in a hardship area a flat rate exclusion of up to $20,000 from gross income in place of the itemized deductions.

Allows a taxpayer to elect not to have the amendments of this Act apply with respect to any taxable year beginning after December 31, 1977, and before Janaury 1, 1979.