Section 280A(g) lets you rent your home to your own business for up to 14 days a year and keep that rental income off your personal return. The business deducts the rent, and you never report it as income.
But, and this is hopefully obvious, you need an actual business with a genuine reason to meet at your house, and a daily rate you could defend if the IRS asked.
For a household where one spouse runs a side business or a consulting LLC, this is a modest, clean tax move. It is not the five-figure windfall some corners of the internet promise. I like it best when it is already adjacent to a legitimate planning rhythm, not when the tax idea is trying to create the meeting by itself.
What is the Augusta Rule?
The Augusta Rule is the nickname for Internal Revenue Code §280A(g). It excludes rental income from your taxable income when you rent out a home you live in for fewer than 15 days in a year. You don’t report the income, and you don’t deduct rental expenses against it.
The name comes from Augusta, Georgia, where homeowners rented their houses to Masters Tournament attendees for one expensive week each spring. Congress wrote the exclusion into the code in 1976 so a short rental like that wouldn’t turn a family into landlords for tax purposes. It applies to any home you use as a residence, anywhere.
Who actually qualifies?
Do you own a legitimate business?
The rule needs two separate taxpayers: a business paying rent and a homeowner receiving it. An S-corporation, a partnership, or an LLC taxed as either can pay rent to its owner and deduct it.
A sole proprietor filing Schedule C can’t, because the owner and the business are the same taxpayer. You’d be paying rent to yourself, and the deduction evaporates. If all your income arrives on a W-2, you have no entity to rent the home to, and this rule has nothing for you.
The entity also has to be doing something.
An LLC with zero revenue holding monthly “board meetings” anyway is a pattern the IRS has seen before.
Is there a genuine business purpose for the meeting?
Annual planning sessions, partner or shareholder meetings, strategy retreats, client events. Document the purpose with an agenda, and have a reason the meeting happened at your house instead of the office or a coffee shop: more room, fewer interruptions, an all-day session that needed a kitchen.
Is your home a reasonable place to hold it?
The space has to fit the stated purpose. A planning retreat for three partners around a dining table is believable. A 40-person shareholder meeting in a two-bedroom condo is not, and the rate you charge has to match what your space could actually command rather than what a downtown conference center bills.
Put together, the gate is a legitimate entity, a genuine purpose, and a defensible rate.
This fits the household where a spouse runs a consulting LLC, or where a side business has grown into an S-corp election.
How much is it actually worth?
Keep the scale in perspective.
The benefit comes down to three things: how many days you can meet at home, what comparable meeting space in your area rents for, and your own marginal tax rate.
For a typical side business, it adds up to something useful and repeatable in a normal year. Useful and repeatable, nowhere near the figures online calculators advertise, because those calculators plug in daily rates that would not survive a second look.
The daily rate is where this lives or dies, so do not set it yourself off a gut feel. Pull quotes from comparable local meeting venues and let those define the number.
The documentation that keeps it defensible
Four documents carry the whole arrangement: a written rental agreement between you and the business, an agenda and minutes for every meeting, an invoice with a payment trail showing the rent moved, and saved quotes from comparable local venues supporting your rate.
Keep them dated and in one place, the way you’d keep receipts for any other deduction.
The Tax Court has shown what happens when the records aren’t there. In Sinopoli v. Commissioner (T.C. Memo. 2023-105), three S-corp owners deducted a large sum of rent over three years for monthly home meetings. The records were thin and the rate had no comparable evidence behind it, so the court allowed only a small fraction of what they claimed.
The rule survived that case. The inflated rate and the missing minutes didn’t. The deduction stands or falls on documentation.
The move suits a household whose business already has a bookkeeping rhythm, where one more folder is a small ask.
If keeping minutes for a dozen meetings sounds like too much for a low-four-figure benefit, that tells you something useful about whether this belongs in your plan.
Where it fits the rest of the plan
This is a checklist item, not the headline. Entity choice, retirement-plan design for the side business, and how the household’s income stacks across brackets will each move more dollars than fourteen days of home rental.
Get those right first, then add this on top if the business and the documentation habit are already in place.
A repeatable few-thousand-dollar move is worth having. Reorganizing your tax life around it is not.
If you’re sorting out where a side business fits inside the rest of the household’s finances, that’s a conversation for a CPA and your planner together. Start with Stoneholt whenever it would help.
FAQ
What is the Augusta Rule?
The Augusta Rule is IRC §280A(g), which excludes rental income from your taxable income when you rent out your residence for fewer than 15 days in a year. Business owners apply it by having their company rent their home for legitimate meetings at a documented fair-market rate.
How many days can I rent my home to my business tax-free?
Fourteen days per tax year. The statute excludes the income only when the home is rented for fewer than 15 days during the year; at 15 days or more, the exclusion disappears and all of the rental income becomes reportable.
Who qualifies for the Augusta Rule?
You need a business that’s a separate taxpayer from you, such as an S-corporation, a partnership, or an LLC taxed as either, plus a genuine business reason to meet at your home and a rate supported by comparable quotes. Sole proprietors and W-2-only households don’t get the deduction side of the arrangement.
How do I document the Augusta Rule for the IRS?
Keep a written rental agreement, an agenda and minutes for each meeting, an invoice with proof of payment, and saved quotes from comparable local meeting venues backing your daily rate. In Sinopoli v. Commissioner, thin records and an unsupported rate cost the taxpayers nearly the entire deduction.
This article is educational only and isn’t individualized tax, legal, or investment advice. Rules change and details depend on your situation; confirm the specifics with a CPA and your planner before acting.
