The Augusta Rule: How to Rent Your Home Tax-Free

The Augusta Rule lets you rent out a home you live in for up to 14 days a year and leave that rent off your federal tax return. It comes from Section 280A(g) of the Internal Revenue Code.

There are three catches:

• The home has to count as your residence for the year, through personal use by you or your family. Owning it isn't enough.
• You can't deduct any expenses for those rental days.
• On the 15th rental day, all of that year's rent becomes reportable.

If you're a landlord, the short version is this: the Augusta Rule doesn't apply to a property you hold only as a rental. It can apply to your own home, or to a vacation home you use enough for it to count as your residence. Here's how it works, who qualifies, and what records help support it.

What is the Augusta Rule?

The Augusta Rule is the nickname for Section 280A(g). It says that if you use a home as a residence during the year and it is "actually rented for less than 15 days," then:

1. You don't include the rental income in your gross income.
2. You don't deduct any expenses because of that rental use.

The IRS puts it plainly in Publication 527: if you use a dwelling unit as a home and rent it less than 15 days during the year, "You aren't required to report the rental income and rental expenses from this activity."

The rule has been in the tax code since 1976. It gets its name from Augusta, Georgia, where homeowners rent their houses to visitors during the Masters golf tournament each April. It's a federal rule, so it works anywhere in the US.

Does the Augusta Rule apply to you?

Two tests decide it: whether the home counts as your residence, and how many days it's rented.

The residence test (second and vacation homes)

A home counts as your residence for the year if your personal use of it exceeds the greater of:

• 14 days, or
• 10% of the days it's rented at a fair rental price.

That's the definition in Section 280A(d)(1).

Your main home passes easily. A vacation home only passes if you actually spend time there.

Under Section 280A(d)(2), some days count as your personal use even when you aren't there:

• Days a family member uses the home, unless they pay fair rent and it's their main home.
• Days anyone uses it in exchange for letting you use another home.
• Days anyone rents it for less than fair rental value.

What counts as a home

Publication 527 defines a dwelling unit as "a house, apartment, condominium, mobile home, boat, vacation home, or similar property." It needs basic living accommodations: a place to sleep, a toilet and cooking facilities.

Is there a dollar limit?

No. Section 280A(g) caps the number of days, not the amount. What limits the amount in practice is fair rent. A guest paying market rates for a festival weekend sets their own price. When you rent to your own business, the rent has to be what you could charge an unrelated party (more on that below).

How the 14-day limit works

The limit counts every day the home is rented during the tax year, across all renters combined. If you rent your home for 8 days on Airbnb and 6 days to your business, you've used all 14.

Stay at 14 days or fewer and the rent is excluded. Rent for 15 days or more and the picture changes completely.

What happens if you rent 15 days or more

Publication 527 says that if you use a dwelling unit as a home and rent it 15 days or more, you "include all your rental income in your income." You then split your expenses between rental use and personal use by the number of days in each. If the rental shows a loss, the deduction for some expenses is limited.

Going over by one day doesn't just tax the extra day. It makes all of that year's rent reportable.

What you can and can't deduct

For a rental of 14 days or fewer, you can't deduct expenses tied to the rental, such as:

• cleaning
• platform fees
• extra utilities
• supplies for guests

Your normal homeowner deductions don't change. Publication 527 says mortgage interest, property taxes and any qualified casualty loss are reported on Schedule A as normally allowed. That means they only help if you itemize, and the usual limits still apply.

Augusta Rule examples

Going from 14 to 15 rental days, or from 14 to 15 personal days at a second home, is what changes the outcome.

Renting your home to your own business

This is the use you'll see most often online: a business owner rents their home to their company for meetings. The company deducts the rent as a business expense, and the owner excludes it as Augusta Rule income. It can work, and it's the version of the rule that has been tested in Tax Court.

What the business needs

What the law requires. The company can deduct the rent only if it's an ordinary and necessary business expense and reasonable in amount, and it has to be able to substantiate both. The rent also has to be paid by a separate taxpayer. An S corporation, C corporation or partnership can rent from its owner. A sole proprietorship, or a single-member LLC owned by an individual, is disregarded for federal income tax unless it elects corporate treatment, so there's no separate business to pay you.

What helps you prove it (recommended, not required):

• A documented business purpose. An agenda, minutes and attendee list for each meeting, such as a board meeting, planning session or staff training held at your home.
• Evidence of fair rent. Quotes or listings for comparable local space for the same headcount and hours.
• A clear payment record. An invoice, and payment from the business's account.

Will you get a 1099?

Generally yes, if the business pays you $2,000 or more in rent. A business generally must report rent it pays in the course of its business on Form 1099-MISC, box 1. For tax years beginning after 2025, the threshold is $2,000 (it was $600). Rent paid by card or through a third-party payment network is reported on Form 1099-K instead.

A 1099 doesn't make the rent taxable. Ask your tax preparer how to show it as excluded, so the IRS's automated matching doesn't flag it.

What happens when it's done badly

In Sinopoli v. Commissioner (T.C. Memo 2023-105), three business owners had their S corporation pay $3,000 to $4,000 per meeting to hold meetings in their homes, then excluded the rent under Section 280A(g). The Tax Court sided with the IRS.

• It allowed $500 per meeting, based on local meeting-space rates in that case, for the meetings it found had actually taken place.
• It noted they hadn't presented written documentation "such as minutes, agendas, or calendars." For one year it accepted their testimony that some meetings happened.
• It found the rent they charged unreasonable.
• It concluded they had "adopted a tax savings scheme."

Is the Augusta Rule a red flag?

The rule itself is legitimate and written into the tax code, and there's no published data on how often it's audited. What Sinopoli does show is where a business-owner arrangement can fail:

• Rent well above what comparable local space costs.
• No written record of the meetings, such as an agenda, minutes or attendee list.
• Renting to a business that isn't a separate taxpayer, such as a sole proprietorship.

Augusta Rule documentation checklist

These are recommended records, not legal requirements one by one. Together they support your exclusion and any business deduction. Keep them for at least as long as the return can be examined:

• A signed rental agreement with the dates, the rate and the purpose (free rental agreement template)
• A day count of every rental day in the year, so you can prove you stayed at 14 or fewer
• A record of your own personal-use days, if it's a second home
• Evidence of fair rent: venue quotes, comparable short-term rental listings or a market rate printout
• Invoices and proof of payment
• For business rentals: the agenda, minutes and attendee list for each meeting
• Any 1099-MISC or 1099-K you receive

Landlord Studio can hold the core of this file. Record each rental payment as income against the property and store key documents such as the agreement and invoices. The free Go plan includes manual income and expense tracking for up to 3 units and up to 10 stored documents. If you're documenting several business meetings a year, Pro raises storage to 250 documents.

Using the Augusta Rule with Airbnb or VRBO

A short-term listing works the same way: 14 rental days or fewer in the year and the rent is excluded, provided the home is your residence. Two things the federal exclusion doesn't change:

• Platforms may still send you a 1099-K. Receiving one doesn't make the income taxable, but your preparer needs to know why it isn't on your return.
• Local rules still apply. Occupancy or lodging taxes, short-term rental permits, HOA rules and your mortgage terms are separate from federal income tax. Check them before you list. Our short-term rental guide covers the basics.

Augusta Rule FAQs

Can an LLC use the Augusta Rule?

It depends on how the LLC is treated for federal tax. An LLC taxed as a partnership, S corporation or C corporation is a separate taxpayer that can rent your home. A single-member LLC owned by an individual is usually a disregarded entity, so there's no separate business to rent from you.

Can I use the Augusta Rule if I rent my home?

Section 280A(g) is written around a home you use as a residence, but most guidance assumes you own it. Most leases also bar subletting without your landlord's permission. Talk to a tax professional before relying on it as a renter.

How do I report the Augusta Rule on my tax return?

For a rental of 14 days or fewer at a home you use as a residence, you don't report the income or expenses, and it doesn't go on Schedule E. If you received a 1099 for the rent, ask your preparer how to show it.

How many times can you use the Augusta Rule?

As often as you like, across one or more bookings, as long as the total stays at 14 rental days or fewer per qualifying home per tax year. The count resets each tax year.

Does the Augusta Rule apply to state taxes?

It's a federal rule. Many states start their income tax calculation from federal income, so the exclusion often carries through, but not always. Check your state's rules or ask a local preparer.

Has the Augusta Rule changed for 2026?

No. Section 280A(g) is unchanged. The only 2026 change is the higher 1099-MISC rent threshold covered above.

This article is general information, not tax advice. Tax rules depend on your circumstances, so talk to a CPA or enrolled agent before using the Augusta Rule, especially for rentals to your own business. Rules checked against IRC §280A, IRS Publication 527 (2025) and the 2026 Instructions for Forms 1099-MISC and 1099-NEC on 30 October 2026.