Home › Advanced Tax Strategies › Unlock Tax-Free Income with the Augusta Rule
REI tax strategy · 07

Unlock Tax-Free Income with the Augusta Rule

By Roger T. Herring, MSCTAUpdated 2026-10-01~6 min read
Quick answerUnder Section 280A — the Augusta Rule — you can rent your primary or secondary residence for up to 14 days per year without reporting the rental income. When the tenant is your own business and the use is legitimate (meetings, training, a year-end team event), the business deducts the rent and you receive it tax-free.
On this page
  1. How does the Augusta Rule work?
  2. How to implement the Augusta Rule
  3. Why it’s a win-win
  4. Ready to use it?

How does the Augusta Rule work?

The Augusta Rule (Section 280A) allows you to rent your home for up to 14 days per year — completely tax-free. It’s named after Augusta, Georgia, where residents rent their homes during the Masters Tournament. For business owners and investors, the rule lets you rent your primary or secondary residence to your own business for legitimate purposes — hosting meetings, training events, or a year-end holiday work party. Your business deducts the rental as an expense, and you don’t have to report the income.

How to implement the Augusta Rule

  1. Establish fair market value. Determine a fair rental rate by researching local venues or similar properties. Include what the venue would charge for meeting space, AV equipment, and catering.
  2. Create a rental agreement. Draft an agreement between your business and your property documenting the business purpose, dates and rate.
  3. Issue a 1099. Your business issues a 1099 for the rent paid. You report the rent on Schedule E, and the 14-day exemption removes it from taxable income.
Documentation winsKeep meeting agendas, minutes or attendee lists for each rental day, plus your rate comparables. The strategy is simple; the audit defense is in the paperwork.

Why it’s a win-win

Your business gets a legitimate tax deduction, and you receive tax-free rental income. It pairs naturally with an S-Corp or other operating entity. Follow the IRS rules closely — the rule is powerful precisely because it’s easy to abuse, and the IRS knows it.

Ready to use it?

At Investors Accounting we set up the Augusta Rule properly, ensuring compliance with all IRS requirements. Book a free Discovery Call to see how it fits your business.

See whether this strategy fits your portfolio

A free 30-minute Discovery Call. We’ll either find meaningful money to preserve — or tell you honestly that you’re already well protected.

Book my free Discovery Call →

Frequently asked questions

It works best with a separate business entity (S-Corp, partnership, C-Corp). A Schedule C sole proprietor renting to themselves faces self-dealing issues — talk to us first.
Board or shareholder meetings, strategic planning sessions, staff training, client events, and team celebrations — documented with an agenda and attendance.
If you exceed 14 rental days in a year, all of the rental income becomes taxable, not just the excess. Stay at or under 14.
Use comparable local rates for meeting or event space of similar size and amenities. Keep the quotes or listings you used as support.
Yes, and it is one of the cleanest setups. Your S-Corp rents your home for legitimate business meetings and deducts the fair rent it pays, and you leave that rent out of income as long as the home is rented 14 days or fewer in the year. Document each meeting with an agenda, attendees and notes, and base the rate on comparable local venues.
Augusta RuleSection 280Atax-free rental incomebusiness deductions

Related strategies

06

Lower Self-Employment Tax with an S-Corp Election

How an S-Corp election lets flippers, wholesalers and agents split income into a reasonable salary plus distributions to reduce…

Read →
08

Self-Directed IRAs for Tax-Free Real Estate Investing

How a Self-Directed IRA lets you buy real estate inside a retirement account for tax-free (Roth) or tax-deferred (Traditional)…

Read →
04

How Real Estate Pros Get Unlimited Rental Deductions

How to qualify for Real Estate Professional Status — the 750-hour and more-than-50% tests plus material participation — and…

Read →

← All advanced tax strategies · Go deeper in the e-books and the e-course.

Roger T. Herring, MSCTA

Roger T. Herring, MSCTA

Founder & CEO, Investors Accounting · Certified Tax Advisor · In practice since 1999

The Citadel ’91, former U.S. Army Reserve officer, and a corporate career from staff accountant to CFO before founding Investors Accounting to help real estate investors keep more of what they earn. Author of Real Estate Tax Killers, The Real Estate Investing Tax Blueprint and Secrets of the Short Term Rental.

Turn this strategy into a plan for your portfolio

Thirty minutes, no preparation, no obligation.

Book my free Discovery Call →Watch the free webinar
Powered by Precision Planning Group

Proactive tax strategy and wealth preservation for real estate investors and high-income earners. Led by Roger T. Herring, MSCTA — In practice since 1999.

1755 North Brown Road, Suite 200
Lawrenceville, GA 30043
Mon–Fri 8:30am–5:00pm ET
(678) 690-5228

The Investors Accountant is a brand of Precision Planning Group, providing tax planning and advisory services for real estate investors. Any strategies referenced — including cost segregation, bonus depreciation, Real Estate Professional Status, the short-term rental provisions, and §1031 exchanges — are educational and illustrative; eligibility and results depend entirely on your specific facts and circumstances. All figures shown are illustrative only and are not a promise of savings. Precision Planning Group provides tax planning and advisory services only; it does not provide legal services or legal advice, and any entity, ownership, or asset-protection structure should be reviewed and implemented with a licensed attorney. Nothing here is tax, legal, or investment advice. Learn more at The Precision Method™.

To ensure compliance with requirements imposed by U.S. Treasury Circular 230, any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending to another party any transaction or matter addressed herein. © 2026 Investors Accounting LLC.