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The Augusta Rule

If you (A) own a home and (B) own a business, you may be able to use Section 280A of the tax code to receive a significant tax deduction by renting out your home up to 14 days per year.

We're offering a FREE Tax Guide To Help You Maximize this potential savings opportunity.

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What is the Augusta Rule?

Section 280A of the tax code gets its nickname from the historical practice of homeowners in Augusta, Georgia, renting out their homes during the 2-week Masters golf tournament.

Today, it allows savvy homeowners in any location within the U.S. to rent out their personal residence to their business for up to 14 days per year without the need to report that rental income on their individual tax returns.

How Does It Work?

The Augusta Rule is available to most business structures, including LLCs, Partnerships, C corps, and S corporations. However, it's not available for sole proprietorships or single-member LLCs.

If you fall into one of the eligible business structures, consult a tax advisor or accountant to confirm your eligibility.

The Augusta Rule provides a tax-free rental income loophole for sharp entrepreneurs who want to leverage their properties for business purposes. It's an intelligent way to reduce taxable income liabilities, especially for small business owners!

Who Can Benefit?

If you (1) own a home and (2) own a business, you can rent your home to your business for up to 14 days annually.

The rental income you receive during this 14-day window is tax-free and need not be reported on your personal tax return.

Essentially, you're treating your personal home as a business expense by renting it out to your business.

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The Potential Tax Savings Can Be Significant

Ultimately, the tax savings depend on the market rates for rental properties in your area, among other factors. But, using the area near Augusta, GA, some entrepreneurs leverage this tax provision to make over $100,000 renting out their property for just a couple of weeks.

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tax-free renting
BUSINESS INSIDER

A family makes over $100,000 tax-free renting out their home to billionaires for one week in April. Welcome to the Masters housing frenzy.

Article by Zoe Rosenberg, Business Insider, Jun 2, 2023.

mortgage
BUSINESS INSIDER

I make $10,000 in 8 days renting out my Augusta home during the Masters. This week alone helps cover my mortgage for the entire year.

Article by Jenny Powers, Business Insider, Apr 9, 2022.

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Our FREE Guide Will Help You Take Advantage Of This Tax Loophole

What's Included?

Our roadmap aims to provide easy-to-understand steps and formulas, allowing you to plug in your exact numbers and get the necessary information to file.

  • 280A Calculator
  • 1099 Template
  • Sample Lease Agreement
  • Relevant Caselaw to Consider

We'll tie it all together with a step-by-step workbook and a video that walks you through it.

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www.dewwealth.com

Not all services will be necessary or appropriate for all clients, and the potential value and benefit of the adviser’s services discussed herein will vary based upon a variety of factors, such as the client’s investment and financial circumstances, tax bracket, prevailing home rental rates, and adherence to the subject strategy’s qualification criteria. Dew Wealth Management, LLC (“Dew Wealth”) is neither a law firm nor an accounting firm and does not provide legal or tax advice. Website visitors and clients should consult an attorney or tax professional regarding their specific legal or tax situation and regarding application of the strategy discussed herein to their individual circumstances. Templates and sample documents are provided for informational purposes only and should be reviewed and/or modified, as needed, in conjunction with the client’s professional adviser. All calculators are provided for informational purposes. The output of calculators made available through this offering or on this site should be viewed as estimates only and should not be relied upon when preparing tax returns or assessing final tax liability. The estimates provided by any such calculators should be reviewed with the client’s chosen professional(s). Among other things, the results of the calculators are derived from your inputs, and consequently, errors or omissions in entering your data into the calculator could result in materially inaccurate outputs. Real life examples are provided for illustrative purposes only and are not based on Dew’s services or advice. No client should expect those outcomes to be replicated, and all client outcomes will vary. Neither the firm’s experience nor knowledge regarding this strategy should be construed as guarantees of a particular outcome. Clients are free to accept or reject any recommendations provided by the firm and may choose to implement accepted recommendations with the professional(s) of the client’s choosing. The effectiveness and potential success of adviser’s services can depend on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and rental market conditions. Past performance does not guarantee future results. All investing comes with risk, including risk of loss.