Augusta Rule FAQ

The Augusta Rule limits are clear under the Augusta rule tax code (IRC §280A(g)):

• 14-Day Limit: You can rent your personal residence for up to 14 days per calendar year
• No Dollar Limit: There is no Augusta rule dollar limit on the amount you can charge per day, as long as it's at fair market value (FMV)
• Tax-Free Income: All rental income received is tax-free and not reported on your 1040
• Business Deduction: Your business can deduct the full rental payment as a legitimate expense

Example: 14 days × $500/day FMV = $7,000 tax-free income + $7,000 business deduction = $2,100-$2,800 in tax savings

The Augusta rule S corp tax strategy is one of the most powerful legitimate tax savings tools for business owners:

• Your S corp rents your personal residence for business meetings
• The S corp deducts the rental payment (reduces taxable income)
• You (the homeowner) receive tax-free rental income under the Augusta rule tax code
• This creates a double benefit: business deduction + tax-free personal income

Augusta rule S corp requirements:

• Meetings must have legitimate business purpose
• Rental rate must be at fair market value
• Stay within the 14-day Augusta rule limits
• Maintain proper documentation (rental agreement, meeting minutes, FMV support)

The Augusta rule tax strategy works for S corps, C corps, LLCs, and partnerships!

The Augusta rule tax code is Internal Revenue Code Section 280A(g). It's named after Augusta, Georgia, where homeowners near the Masters Golf Tournament historically rented homes for 2 weeks tax-free.

Under the Augusta rule tax code:

• IRC §280A(g) states: "If a dwelling unit is used during the taxable year by the taxpayer as a residence and such dwelling unit is actually rented for less than 15 days during the taxable year, then... no deduction otherwise allowable under this chapter because of the rental use of such dwelling unit shall be allowed, and the income derived from such use for the taxable year shall not be included in the gross income of such taxpayer."
• Translation: Rent your home for 14 days or less = no rental income reporting required
• Your business can still deduct the rental payment as a legitimate business expense

The Augusta rule tax code has been part of U.S. tax law since 1976 and is fully IRS-compliant when properly documented.

FMV is based on what a willing third party would pay to rent a comparable space for business meetings in your local market.

Our system collects verified market rates from:

• Residential meeting-use venues
• Peerspace and Airbnb event listings
• Hotel boardrooms and conference rooms

We normalize all rates to a single-day (8-hour) business use standard and compute a weighted median, which is the IRS-preferred way to reduce outliers.

No. You must stay within the 14-day Augusta rule limits.

• If you rent for 15 days or more, you lose the Augusta rule tax strategy benefits
• All rental income becomes taxable
• You must report rental income on Schedule E and can deduct expenses
• The tax-free treatment under the Augusta rule tax code only applies if you stay under 15 days

Exceeding the Augusta rule limits is one of the most common compliance failures. Our system tracks your meeting dates to ensure you stay within the 14-day limit.

Yes, your home is residential — and that's perfectly fine.

• The IRS requires FMV be based on comparable use, not identical zoning.
• You are renting the home as a business meeting space, not as lodging or housing. Hotel meeting rooms serve the same functional purpose and therefore are valid comparables.

To remain conservative:

Hotel rates are included but weighted lower than residential venues.

Yes. IRS rules require FMV to reflect:

• "the price a willing renter would pay for comparable property."
• "Comparable" means functionally similar, not identical construction or zoning.

This is standard appraisal methodology used in real estate, valuations, and tax court cases.

Yes. We apply small, transparent adjustments (capped at ≤25%, the IRS reasonableness safe-harbor) for:

• Privacy
• Amenities
• Business-meeting suitability

These adjustments keep the FMV aligned with actual market pricing.

The IRS and U.S. Tax Court consider median calculations more reliable when prices vary widely.

• Median = more stable
• Average = distorted by high/low outliers

Weighted median is the gold standard for valuation work.

The IRS does not require perfect matches. When exact comparables do not exist, it is acceptable to use:

• residential event spaces
• hotel meeting rooms
• commercial boardrooms

…as long as the same use-case (business meeting) is maintained.

This is fully compliant with IRC §280A(g) FMV standards.

Yes. The FMV report:

• uses verifiable market data
• includes source URLs
• normalizes all rates consistently
• applies IRS-aligned adjustments
• avoids aggressive pricing
• documents every step
• uses conservative weighting

This meets — and exceeds — IRS documentation expectations for the Augusta Rule.

No.

• Augusta Rule rentals are daytime meeting use only, not lodging or overnight stays.
• Only business-use days are counted.

Because markets change, FMV is recalculated annually to keep the rate fresh, accurate, and audit-safe.

Proper Augusta Rule documentation requires 8 essential components:

1. Written rental agreement between homeowner and business
2. Board/member resolution authorizing the rental
3. Meeting agendas for each business meeting date
4. Meeting minutes with attendance verification
5. Professional invoice from homeowner to business
6. Payment proof (check or ACH transaction)
7. Fair Market Value methodology memo with comparables
8. IRS eligibility attestations

Our automated system generates all documents instantly. For detailed requirements, see our complete documentation checklist.

The IRS requires documented proof that your rental rate reflects fair market value:

• Comparable properties with verified rates and source URLs
• Methodology for rate calculation (median preferred over average)
• Adjustments documented with justification (≤25% IRS safe harbor)
• Date of FMV determination
• Market data less than 12 months old

Without this documentation, the IRS can reduce your rate to their own determination or disallow the deduction entirely.

Learn more in our FMV calculator guide with IRS-compliant methodology.

Common audit triggers that lead to disallowed deductions:

• Exceeding 14-day limit (most common failure)
• Inflated FMV rates without proper documentation
• Missing or generic meeting agendas/minutes
• No actual payment from business to homeowner
• Lack of written rental agreement
• No board authorization

The good news: with complete documentation, audit risk is LOW. The IRS expects proper substantiation—which our system automatically provides.

Read our full audit risk guide to understand IRS red flags and how to avoid them.