What is the Augusta Rule for tax purposes?

The Augusta Rule (Section 280A(g)) allows you to rent your personal residence for up to 14 days per year without reporting the rental income. Business owners can use this by having their company rent their home for board meetings or strategy sessions, creating a business deduction while receiving the income tax-free.

Can an S-Corp rent the owner's home under the Augusta Rule?

Yes. The S-Corp pays the owner a fair market rental rate for legitimate business use of the home. The S-Corp deducts the expense, and the owner does not report the income — as long as total rental use stays at or below 14 days per year.

How do I determine a fair rental rate for the Augusta Rule?

Research comparable rates for meeting spaces, conference rooms, or hotel venues in your area. Print documentation from sources like hotel websites or Airbnb listings showing what similar spaces cost per day.

deductions Audience: business 3 min read

The 'Augusta Rule': Renting Your Home to Your Business Tax-Free

Section 280A(g) allows you to rent your home to your business for up to 14 days a year tax-free. Here is how to do it correctly.

Last updated on February 16, 2026

Named after the residents of Augusta, Georgia, who rented their homes during the Masters golf tournament, Section 280A(g) is a powerful loophole for business owners. It allows you to rent your personal residence for up to 14 days per year without reporting the income.

If your S-Corp rents your house for a board meeting, the S-Corp gets a deduction, and you get tax-free income. For context on how this impacts your overall tax bill, review marginal tax rate versus effective tax rate. It is one of the few times the IRS allows money to shift from “Taxable” to “Tax-Free” without catching it.

Key Takeaways

Limit is strictly 14 days per year.
Rent must be 'Reasonable Market Rate' (get comps from Airbnb/hotel).
You must document the business purpose (Board Meeting, Strategy Session).
The income is NOT reported on your Schedule E (personal return).

How to Execute

Schedule Meetings: Plan 14 days of legitimate business meetings (monthly board reviews, quarterly planning).
Get Quotes: Print a PDF of a comparable meeting room at a local hotel or coworking space. e.g., “The Marriott conference room costs $500/day.” Treat this the same way you would document an accountable plan.
Write the Check: Have your business pay you (the specific individual) $500.
Document It: Create “Minutes of the Meeting” detailing what was discussed.
Book It:
- Business: Expense > “Rent Expense” ($7,000 deduction).
- Personal: Do not report it. Section 280A(g) explicitly excludes it from gross income.

The Warning

Do not be greedy.

Do not rent it for $5,000/day if the Marriott is $500.
Do not do it 15 days. (If you do 15, all 15 become taxable).
Do not forget the paper trail.

Simple, legal, and effective.

How It Fits with Other Strategies

The Augusta Rule works best alongside other business-owner deductions:

Home Office: Already claiming a home office deduction? The Augusta Rule covers different use (meeting space vs. dedicated office). They can coexist.
S-Corp Owners: The Augusta Rule pairs naturally with S-Corp tax strategies since the S-Corp is the entity writing the check.
Entity Selection: Not sure which structure lets you use this? See best business structure for taxes.
Audit Protection: Keep strong records to support the rental rate and meeting purpose. Our audit proofing guide shows what documentation survives scrutiny.

How sharper.tax Helps

sharper.tax identifies whether your business structure supports the Augusta Rule and estimates the potential deduction based on your local market rates. We flag strategies like this that most filers miss entirely and show how the deduction affects your overall tax picture. Sophisticated tax planning used to require a high-end CPA --- we make it available for free.

Sources

The information above is educational and not tax advice.