Rent Your Home to Your Business, Tax-Free

For Small-Business Owners · Audit-Ready · Step-by-Step

If you own both a home and a profitable business, the Augusta Rule is one of the cleanest ways to move money from your company to your personal bank account — legally tax-free.

This guide gives you everything you need: what the rule says, how to price your home like a comparable venue, the exact documentation to keep, entity-specific nuances, audit defense, templates, examples, and FAQs.

Schedule Your 30-Minute Strategy Session →

1) What the Augusta Rule Is (and Why It Exists)

Statute: Internal Revenue Code §280A(g).
If you rent out a dwelling unit you use as a residence for fewer than 15 days in a tax year, the rental income is excluded from gross income, and no rental deductions are allowed (beyond normal Schedule A items like mortgage interest/property taxes).

Plain English: Rent your personal residence to your business for bona fide business purposes ≤ 14 days/year. Your company deducts the rent; you don’t report the income. Cross 14 days, and the exclusion disappears for that year.

Origin: Augusta, Georgia — residents renting homes during the Masters. Congress created a bright-line rule so short, infrequent rentals wouldn’t drag homeowners into landlord compliance.

Who benefits: Profitable small-business owners who

• Own a home (primary or secondary)

• Hold real meetings/events at that home

• Want a compliant, low-friction way to reduce taxable business income while receiving personal cash flows tax-free

Get Your Augusta Rule Plan — 30Min →

2) Execute It Correctly: A Complete, Step-by-Step System

Step A — Identify Legitimate Business Uses

Qualifies:

• Annual or quarterly strategy meetings

• Board or shareholder meetings; partner retreats

• Staff training or hiring panels

• Content or marketing production days

• Client advisory sessions

Does not qualify:

• Family dinners or social gatherings

• Events without an agenda or attendees

• Personal parties or unrelated activities

Use your home for days your business would otherwise rent a venue — then pay yourself fair market rent.

Step B — Establish Fair Market Rent (before the event)

1. Collect 3–5 local comparable venue quotes (hotel boardrooms, coworking rooms, conference centers).

2. Normalize for duration, capacity, parking, A/V, privacy.

3. Compute an average and document screenshots or PDFs with date stamps.

Step C — Authorize the Arrangement

• S Corps / C Corps: Board resolution authorizing ≤ 14 days at FMV

• LLCs / Partnerships: Manager/member consent memo

• Sole proprietors: Formal memo to file; maintain fund separation

Step D — Run the Day Like a Real Meeting

• Send a calendar invite and agenda

• Maintain an attendee list or sign-in sheet

• Take photos of setup (tables, whiteboards, projector)

• Keep minutes or summary notes

Step E — Invoice the Business

Create a simple invoice from you (homeowner) to your entity for
“Home rental under IRC §280A(g)” with dates, daily FMV, and total due. Save as PDF.

Step F — Pay From the Business Account (same tax year)

• Transfer ACH/check from business to personal account (memo: “Home rental — §280A(g)”)

• Record it in your books as Rent — Home (Sec. 280A(g))

Step G — Stay Below 15 Days

Keep a dedicated tally. If needed, use a December + January cadence (e.g., Dec 10–14 and Jan 10–14) to stay compliant while optimizing cash flow.

Result: Business deducts the rent; homeowner excludes it. No 1099 is required for §280A(g) amounts.

Have Taxstra Set This Up — 30Min →

3) Pricing Your Home: Defensible Fair-Market Valuation Methods

Your rate must be reasonable, local, and repeatable. Use one or several of these methods:

Method 1 — Comparable Venue Quotes (Primary)

1. Gather 3–5 written quotes or screenshots within ~10 miles.

2. Adjust for capacity, amenities, exclusivity, parking, and location.

3. Average the best 3; add a small premium if you provide special facilities.

Method 2 — Platform Benchmarks

• Peerspace / LiquidSpace: Meeting or day rates for comparable spaces.

• Hotels: Boardroom or day-office rates.

• Coworking spaces: Conference room packages normalized to a day rate.

Method 3 — Cost Build-Up (Use Cautiously)

Start with base day rates from nearby markets; adjust for local pricing and amenities. Document logic clearly.

Typical FMV Ranges:

• Tier 1 (NYC, SF, LA): $1,500–$3,000+

• Tier 2 (Austin, Denver, Nashville): $900–$1,800

• Tier 3 (Mid-size metros): $600–$1,400

• Smaller markets: $400–$900

Keep PDFs/screenshots of all comps with visible URLs and date stamps. Refresh annually.

Validate Your FMV With a CPA — 30Min →

4) Documentation & Audit Defense: Exactly What to Keep

Annual Packet Checklist

1. Authorization (board resolution or consent)

2. FMV proof (3–5 comps)

3. Agendas and invites

4. Attendee lists and minutes

5. Evidence (photos, Zoom screenshots)

6. Invoice (homeowner → business)

7. Payment proof (bank record)

8. Book entry (expense attached in QBO)

Compliance Guardrails

• ≤ 14 total days in the year

• Business purpose must be genuine

• FMV must be local and consistent

• Paid in same tax year

• No 1099 issued

• No overlap with home-office deduction

Common Red Flags:
“Round” numbers, missing agendas, unpaid entries, or identical rates every year.

Request Our Audit-Ready Packet — 30Min →

5) Interactions, Edge Cases & Advanced Planning

Home Office vs Augusta Rule

Both are allowed — just don’t claim both for the same time block. Keep Augusta for event days and home-office for ongoing workspace.

S Corporations

• Reduces S Corp income; may improve QBI deduction

• Keep annual board resolutions

Partnerships & Multi-Owner LLCs

• Each partner can rent their own home up to 14 days

• Keep separate documentation per owner

C Corporations

• Permissible with board approval; ensure rates are reasonable

Sole Proprietors

• Maintain strict fund separation and documentation

Short-Term Rentals & Second Homes

• Cannot apply Augusta to existing rental days on Schedule E

• Second homes can qualify if personally used as a residence

Accountable Plans vs Augusta

Keep them separate: accountable plans reimburse expenses, Augusta pays rent.

December / January Stagger

Use end-of-year and start-of-year meetings to maximize benefits across two years.

Design Your Multi-Entity Plan — 30Min →

6) Worked Examples, Numbers & Benchmarks

Example A — S Corp Marketing Agency (Tier-2 Market)

• FMV/day: $1,200

• 12 days → $14,400 total rent

• Owner rate ≈ 35%
  Tax saved: ~$5,040

Example B — Physician Practice (Midwest)

• FMV/day: $1,000

• 10 days → $10,000
  Tax saved: ~$3,700/year

Example C — Partnership with Two Owners

• Owner A: $900/day × 7 days = $6,300

• Owner B: $800/day × 5 days = $4,000
  Total deducted: $10,300 (each excludes income personally)

Run Your Numbers With Us — 30Min →

7) Templates You Can Use Today

Board Resolution (S Corp / C Corp)

Resolution of the Board of Directors — Use of Shareholder Residence
The Board authorizes use of the shareholder’s personal residence for business meetings, trainings, and retreats, not to exceed 14 total days.
The Company shall pay fair market rent per day, supported by local comparables.

Approved on ____________
Secretary: ____________ Chair: ____________

Manager / Member Consent (LLC)

Manager/Member Consent — Use of Member Residence
The undersigned authorizes business use of the member’s personal residence, ≤ 14 total days per year at FMV.
All supporting documentation (agendas, attendees, minutes, invoice, payment proof) will be maintained.

Dated: ____________ Signed: ____________

Invoice Template

INVOICE
From: [Homeowner Name, Address]
To: [Entity Legal Name, Address]
Description: Home rental for business use — IRC §280A(g)
Dates of Use: [List dates]
Rate: $[FMV/day] per day
Total Due: $[Total]
Terms: Due upon receipt
Memo: “Home rental — §280A(g)”

Agenda + Minutes

MEETING AGENDA / MINUTES
Date: ____________ Location: [Home Address]
Purpose: [Annual Strategy & Budget]
Attendees: [Names/Roles]

Agenda:

1. Review prior year KPIs and P&L

2. Approve budget and hiring plan

3. Marketing roadmap

4. Risks and technology investments

Notes:

Action Items:

8) Comprehensive FAQ

Do I report Augusta Rule income on my return?
No. If you rent ≤ 14 days, that income is excluded from gross income.

Should my company issue me a 1099?
No. §280A(g) amounts are exempt.

Can I exceed 14 days?
No. If you hit 15+, the exclusion disappears.

Can I combine with home-office deduction?
Yes, if you separate by day or area.

What if I forget to pay by year-end?
Then it’s not deductible. Payment must clear in the same year.

What if my town lacks venue comps?
Use the nearest city’s quotes and adjust.

Do second homes qualify?
Yes, if personally used as a residence and not already a rental.

Is this audited often?
Rarely, but it does happen.  You should ensure you have proper documentation at the time of implementing the rental.  Don't wait for the IRS.

Can each partner/shareholder use their own home?
Yes. Each has their own 14-day limit.

Is the rent subject to self-employment or NIIT tax?
No. It’s not reported at all when compliant.

Ready to Implement the Augusta Rule the Right Way?

For most profitable small businesses, §280A(g) is the cleanest legal tax-free transfer in the code — when executed with correct FMV, timing, and documentation.

We’ll tailor the rate, paperwork, and cadence to your entity and market — and prepare your audit-ready folder so it stands up under scrutiny.

Schedule Your 30-Minute Strategy Session →

Disclaimer: Educational information only. Not legal or tax advice. Consult your CPA or attorney for guidance specific to your situation.