Thank you both for your input. I have done some further research but still cannot find a definitive answer.
Actually I would like to move to a less expensive area but since the employer renewed the lease last September for another two years, I am stuck here until at least September 2008. Even at that point, my employer may refuse to move me since a move is quite costly and is at company expense. However, as I previously mentioned, because of my position, my employer requires that
I am relatively close to work, which means residing in downtown Tokyo, where the rent is quite high. If it wasn’t for this job, I would be residing in my wife’s home, which is about 200 miles north of Tokyo, where the rent is about one tenth the cost. There is no company compound with residential facilities; therefore, everyone, including the company president, resides in downtown Tokyo.
My employer leases the apartment that I live in and charges me rent and takes the rent, about $1,600 a month, out of my monthly pay. The actual lease for the apartment is a lot more than what I pay, but I never see that since my employer actually has the lease and merely sublets the apartment to me.
I guess I am looking for a clear cut, black and white answer for a situation that appears to have a lot of gray in regards to whether or not the difference between the actual lease amount that the employer pays and what the employer charges me for rent is taxable income. I want to do the right thing but like anyone else I also do not want to pay more taxes than what I am legally required to.