IRC §280A(g)
Augusta Rule (Section 280A)
The Augusta Rule lets your business pay rent for using your home for legitimate business purposes (meetings, retreats, training) up to 14 days per year. The rent is a deductible business expense on your entity return — and the rental income is excluded from your personal return entirely.
The savings come from two places simultaneously: a deduction on the business side and an income exclusion on your personal side. These are separate line items on separate filings, not a single adjustment.
Who this may apply to
- Own a personal residence
- Have a legitimate business purpose for using the space
- Rent at fair market rates (documentable)
- Use for 14 days or less per year
Strategy connections
Works well with
- S-Corporation Election: A separate business entity may have a documented business reason to rent an owner’s residence.
- Home Office Deduction: Both involve a residence but apply different rules to different uses.
What could block this
- No qualifying residence rental
- Rental use exceeds the statutory day limit
- No documented business purpose or supportable fair rental value
Important considerations
- This does NOT work for sole proprietors — you cannot rent property to yourself
- The rental rate must be demonstrably fair market value — a rate significantly above comparable rentals will draw IRS scrutiny
- You must have a genuine business purpose — personal family gatherings that happen to include some business discussion don’t qualify
- Go over 14 days and 100% of rental income becomes taxable and the deduction rules change significantly
Professional support
Tax Strategist
Will help document fair market rent, create rental agreements, and ensure proper implementation to avoid IRS scrutiny.
Timing
Must be used within the tax year. Schedule the meetings and payments before December 31. All 14 days can be used consecutively or spread throughout the year.
Official sources
Reviewed 2026-07-24