Augusta Rule §280A(g) Deduction Calculator
Calculate annual tax savings from the Augusta Rule — IRC §280A(g) — which lets homeowners rent their personal residence to their own business for up to 14 days per year tax-free, while the business deducts the rent paid. Properly used, it saves 24–37% federal tax on the rent amount.
The Augusta Rule Calculator is a free, browser-based tool that estimates the tax saving when your business rents your personal residence for up to 14 days a year under IRC §280A(g). Enter the daily rate, number of days and your marginal tax rate to see the deduction, the tax-free rental income, and the net benefit.
What Is the Augusta Rule (§280A(g))?
The "Augusta Rule" is a nickname for IRC §280A(g) — a tax provision named for homeowners in Augusta, Georgia who rented their homes to Masters Tournament attendees and lobbied Congress for a tax exemption. The rule excludes from gross income any rental income from your personal residence rented for fewer than 15 days during the tax year. For business owners, this enables a powerful strategy: your business pays you fair market rent to use your home for legitimate business purposes (board meetings, staff retreats, training sessions). Your business deducts the rent as an ordinary expense; you receive the rent income tax-free (source: IRC §280A(g), Cornell Law).
Eligibility Requirements
(1) Personal residence: the property must be your home (primary or vacation). Pure rental property does not qualify. (2) 14 days or fewer: total rental days for the year must not exceed 14. The 15th day disqualifies ALL the rental income. (3) Fair market rate: rent charged must be comparable to similar venues (hotels, conference rooms, banquet halls) in your area. (4) Legitimate business purpose: the business must have a real reason to use the home (board meeting, training, recording video, hosting clients). Personal events disguised as business will be disallowed. (5) Documentation: sign a lease agreement between owner and entity, document the meeting purpose, agenda, attendees, and pay via check or transfer with a paper trail.
Setting a Defensible Rental Rate
Per Sinopoli v. Commissioner (T.C. Memo 2023-105), the IRS scrutinizes rates. Comparables to use: (1) local hotel conference room rates per day, (2) Airbnb/VRBO daily prices for similar homes, (3) banquet/event venue quotes, (4) professional services like Peerspace listings. Document at least 3 comparables in writing before each meeting. Daily rates typically range $500–$3,500 depending on city, home size, and amenities. Conservative target: keep within 80–120% of the median comparable. Document research in the meeting file.
Tax Savings Mechanics
The strategy creates a true wash from a cash-flow perspective: business pays rent → you receive rent. But the tax treatment is asymmetric: business deducts at ordinary income rates (24–37% federal + state + sometimes SE), and you pay no tax on the rent received. Net savings = business marginal rate × annual rent. Example: $1,500/day × 14 days = $21,000 rent. Business in 24% federal + 5% state bracket saves $6,090. Sole-proprietor or partnership owner additionally saves SE tax on the equivalent salary they would otherwise have taken. S-corp owners do not save SE tax (already exempt on distributions).
Common Augusta Rule Mistakes
(1) Exceeding 14 days: day 15 voids the entire exclusion — count carefully. (2) Inflated rates: charging $5,000/day in a market where comps are $800 invites IRS challenge. (3) No documentation: the IRS won upheld disallowance in Sinopoli because taxpayer had no contemporaneous records. (4) Personal dressed up as business: birthday parties, family Thanksgiving with a brief "discussion" don't qualify. (5) No 1099 issued: if rent > $600, business must issue Form 1099-MISC to the homeowner — the homeowner reports on Schedule E with full offsetting deduction (or relies on §280A(g) exclusion to report $0). Compare with our home office deduction, QBI 199A, §179 deduction, K-1 pass-through.
2026 Documentation Template Every Meeting Needs
The Sinopoli loss came down to missing paperwork, not a bad strategy. For each meeting keep a single one-page file containing: (1) Rental Agreement — date, address, entity name, day count for the year to date, agreed daily rate, payment method. (2) Comparable-Rate Evidence — three screenshots or PDFs from Peerspace, hotel corporate meeting-room pages, or venue quote emails, dated no more than 30 days before the meeting. (3) Meeting Agenda — start/end time, topics with time allocation, decisions expected. (4) Attendance Log — printed sign-in with role of each attendee (owner, employee, contractor, invited guest). (5) Minutes — one page with resolutions or action items produced. (6) Payment Trail — dated check image or ACH confirmation from the business account to the homeowner's personal account (never cash). Store the six items in one PDF per meeting. If audited, hand over the folder — do not reconstruct after the fact. See the current IRS treatment in IRS Publication 527 and the §280A(g) statute at Cornell 26 U.S.C. §280A.
Last updated 2026-07-01. Estimates only — IRS scrutiny is increasing; consult a CPA. Sources: IRS Publication 527, IRC §280A(g) (Cornell LII), Sinopoli v. Commissioner T.C. Memo 2023-105.
Who Cannot Use the Augusta Rule
The §280A(g) exclusion requires a genuine payer and a genuine payee, and that rules out the single most common case people try it on: a sole proprietor filing Schedule C cannot rent their home to themselves, because there is no separate entity on the other side of the transaction — the payment nets to zero and the deduction is disallowed. The strategy works when a distinct business entity pays the individual homeowner: an S-corporation, C-corporation, partnership or multi-member LLC. Single-member LLCs taxed as disregarded entities have the same problem as a sole proprietorship unless they have elected corporate taxation. Two further disqualifiers: the property must be a personal residence rather than one already in service as a rental, and the total across the year must stay at or below 14 days — day 15 makes the entire year’s rental income taxable, not just the excess. The rented days must also serve a real business purpose with contemporaneous documentation. Background on the 14-day rule is in IRS Publication 527. Updated 2026-08-03.
Does the Business Have to Issue a 1099 for Augusta Rule Rent?
This is the step that turns a clean deduction into an IRS notice, and the threshold moved this year. A business that pays rent generally reports it in Box 1 of Form 1099-MISC, and the IRS instructions now say to "Enter amounts of $2,000 or more for all types of rents" — up from the long-standing $600 figure, because "for tax years beginning after 2025, the minimum threshold amount for reporting certain payments… increased to $2,000 and may be adjusted for inflation beginning in calendar year 2027" (IRS Instructions for Forms 1099-MISC and 1099-NEC). Most Augusta Rule arrangements clear $2,000 easily — 14 days at a defensible $500 rate is $7,000 — so assume a 1099-MISC is coming. The trap is what happens next: the homeowner receives a 1099 for income that §280A(g) says is not taxable, and simply omitting it from the return triggers an automated CP2000 under-reporting notice when IRS matching finds no corresponding entry. The usual practitioner treatment is to report the amount on Schedule E and then back it out with an offsetting line referencing the §280A(g) exclusion, so the matching system sees the figure and the return still shows zero taxable rent. Two related points. The rent must be paid by cheque or transfer from the business account to the homeowner’s personal account — a journal entry with no money moving is the weakest fact pattern in every disallowed case. And the 1099 should match the rental agreement, the board minutes and the bank record to the dollar; mismatched figures across those four documents are what auditors follow. Confirm your own filing treatment with a CPA before you file. Updated 2026-08-20.