At Boyer Financial Services, we’re always looking for smart, strategic ways to help our clients maximize their wealth and reduce unnecessary tax burdens. One lesser-known—but highly effective—strategy we often discuss with business owners and high-income families is the Augusta Rule.
Named after Augusta, Georgia—where homeowners rent out their properties each year during the Masters golf tournament—the Augusta Rule allows you to rent out your home for up to 14 days per year tax-free. But its benefits extend far beyond golf fans.
What Is the Augusta Rule?
The Augusta Rule stems from Section 280A(g) of the Internal Revenue Code. It permits homeowners to rent out their personal residence for 14 days or fewer per year without having to report the rental income on their tax return.
Here’s the key: If structured correctly, this can be a powerful tool for business owners who own a home and a separate business entity.
How Business Owners Use the Augusta Rule
If you own an S-Corp, LLC, or C-Corp, you can rent your home to your business for legitimate business purposes—such as hosting:
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Board meetings
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Strategic planning sessions
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Staff retreats
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Client dinners or educational seminars
Your business gets a tax-deductible expense, and you (as the homeowner) receive rental income that is completely tax-free—up to 14 days per year.
Example: Turning a Strategy Session into a Tax Advantage
Let’s say you host a monthly strategy meeting for your leadership team at your home. The business pays you a fair market rate—let’s say $2,000 per meeting. If you do this 12 times a year, you receive $24,000 in rental income.
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The business deducts the $24,000 as a business expense.
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You don’t pay a single dollar of income tax on it (as long as you stay within the 14-day limit).
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That’s a $24,000 tax-free benefit—legally.
Important Compliance Tips
To stay within the IRS’s good graces, you need to:
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Document the business purpose of each meeting
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Keep detailed minutes or agendas
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Pay yourself a reasonable, market-based rental rate
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Limit use to 14 days or fewer per calendar year
We often recommend clients obtain a quote or estimate from a local event rental company or venue to justify their rental rate.
Is the Augusta Rule Right for You?
This strategy is ideal for:
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Business owners with a home suitable for meetings or gatherings
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Those who own an LLC or S-Corp
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Individuals looking to reduce their business’s tax liability while benefiting personally
As with all tax strategies, planning and documentation are critical. While the Augusta Rule offers a powerful benefit, missteps can trigger audits or disallowed deductions.
Let’s Talk About Tax Strategies That Fit Your Life
At Boyer Financial Services, we help high-income families, entrepreneurs, and professional athletes design comprehensive wealth strategies that align with their values and maximize every available opportunity. If you’d like to explore whether the Augusta Rule makes sense for your business, we’re here to guide you—every step of the way.
