The Augusta Rule: what it is and how to use it
The Augusta Rule lets you rent your home for up to 14 days a year without reporting the rental income. Owners of S-Corps, C-Corps and partnerships sometimes rent their home to their business for real meetings. It takes a fair rate, real business use and solid records, and it doesn't fit sole proprietors.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Limit. 14 days or fewer per year
- Works for. S-Corps, C-Corps and partnerships, generally
- Needs. Fair market rent, invoice, agenda and minutes
Where does the name come from?
Homeowners in Augusta, Georgia, rent out their houses during the Masters golf tournament. The rule in Internal Revenue Code Section 280A(g) says that if you rent your home for fewer than 15 days in a year, you don't report the income, and you can't deduct rental expenses against it.
How do business owners use it?
Your company pays you fair rent to use your home for a real business purpose, like a board meeting or a strategy day. The company deducts the rent as a business expense. You don't report the income. That can move money out of the business tax-free.
For example, renting your home for 6 days at $1,000 a day moves $6,000. If you're in the 24% bracket, that may save a little under $1,500 in income tax.
Who is it for?
| Business | Does it work? |
|---|---|
| S-Corp | Generally yes, with real business use |
| C-Corp | Generally yes |
| Partnership | Generally yes |
| Sole proprietorship | No, you can't rent to yourself |
| Single-member LLC, no election | No |
What does the IRS want to see?
- A real business event, not a family dinner
- Rent at a fair market rate, based on comparable local venues
- A written rental agreement and invoice
- Payment from the business to you
- An agenda, attendees and minutes
- No more than 14 days in the year
Keep quotes from nearby meeting spaces to support your rate. $5,000 a day for your suburban living room will not hold up.
What are the risks?
This isn't a loophole for family time. The IRS has challenged deductions where owners couldn't show business use or fair rent. In a 2023 Tax Court case, most of an S-Corp's rent deduction was disallowed because the records were weak. The rule that keeps the income tax-free stands on its own, but the company's deduction depends on your records.
Also note that it can't overlap with a home office deduction for the same space and time. Before you try it, talk to us in a planning review. It works for a narrow set of owners who hold real meetings.
Sources
- IRS Publication 527: Residential rental property
- IRS Topic 415: Renting residential and vacation property
General information, not tax advice for your situation.
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See our tax planning and CFO serviceCan I use the Augusta Rule with an LLC?
If your LLC is taxed as an S-Corp, C-Corp or partnership, it may work. A single-member LLC with no election can't.
How much can I charge my business for rent?
A fair market rate for similar space in your area. Keep comparable quotes in your file.
Do I report Augusta Rule income on my tax return?
Generally no, if you rent for 14 days or fewer, and don't use it as a rental otherwise.
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