The Augusta Rule lets you rent your home to your own business for up to 14 days a year, collect the rent tax-free, and let the business deduct it. It is real, it is in the tax code, and it gets abused, so documentation is what carries it.
Where it comes from
Section 280A(g) of the code says that if you rent a home for fewer than 15 days in a year, you do not report the rental income. The nickname comes from Augusta, Georgia, where homeowners rent to Masters attendees each spring and pay no tax on it. A business owner can use the same rule.
How it works
Your business holds a real meeting at your home, a board meeting, a planning session, a team event, and pays you rent for the day. You keep the rent tax-free up to 14 days a year. The business deducts it as an expense. The money moves from a taxed place, your business, to a tax-free one, your personal return.
| Rule | Detail |
|---|---|
| Day limit | 14 or fewer rental days per year |
| Day 15 | Cliff: the whole year of rent becomes taxable |
| Rent | Fair market rate, what a real venue would charge |
| Payer | A separate entity (S-Corp, C-Corp, partnership), not a sole prop renting to itself |
Fourteen days is the ceiling and fifteen is a cliff. On day fifteen the entire year of rent becomes taxable.
What makes it hold up
Document like the IRS is watching
A real business purpose, an agenda and minutes, an attendee list, a fair-market rate backed by a couple of venue quotes, and a written rental agreement with a clean payment from the business account. Skip these and it looks like moving money to dodge tax, which is where it falls apart.
Who it fits, and who it does not
This works for an owner with a real entity and real meetings to hold. It does not work for a sole proprietor renting to themselves, since that is the same taxpayer on both sides. Done right it is clean. Done loose it is an audit magnet. If you have an S-Corp or C-Corp and hold real meetings, this is worth setting up the right way. Book a consultation.