The Augusta Rule: Renting Your Home to Your Business for Meetings

By MercConsulting · Published 2026-08-16 · Updated 2026-09-07

Under the Augusta rule, an owner can rent a personal residence to the business for fourteen days or fewer a year, with the rent excluded from personal income and deductible to the company, if the meetings are real and the rate is documented.

The Augusta rule, from Section 280A(g) of the Internal Revenue Code, lets a business owner rent a personal residence to the company for fourteen days or fewer each year without reporting the rental income, while the business deducts the rent as an ordinary meeting expense. It holds up only when the meetings are real, the rate matches what comparable space actually costs, and the records exist before anyone asks for them. Rent the home for a fifteenth day and the exclusion is lost for the whole year.

This article covers where the rule comes from, which meetings qualify, how to set a rental rate you can defend, which entity types it works for, and the mistakes the Tax Court has already penalized. The statute is two sentences long, and that brevity is the trap. The exclusion on the homeowner's side is nearly automatic; the deduction on the business side must satisfy the same standards as any other expense, and that is where nearly every problem with the Augusta rule for business owners begins.

"We had been holding our planning days at my house for years and never charged the company anything. Our CPA asked for the agendas and a couple of venue quotes, we signed a one-page lease, and the whole thing has been clean and boring ever since."

What the Augusta Rule for Business Owners Actually Says

The rule takes its name from Augusta, Georgia, where homeowners renting their houses to visitors during the annual golf tournament wanted a simple answer on the tax treatment. Congress gave one: if a dwelling unit you use as a residence is rented for fewer than fifteen days in the year, the rental income is excluded from your gross income and no deductions attributable to the rental are allowed. Nothing in the statute limits who the tenant may be, so your own company can be the renter.

The arrangement has two halves governed by different parts of the code. Your side, the exclusion, comes from Section 280A(g). The company's side, the deduction, comes from the ordinary rules for business expenses: the rent must be ordinary and necessary, reasonable in amount, and incurred for a genuine business purpose. Examiners rarely challenge the exclusion. They challenge the deduction, and when the deduction fails the company loses the expense while you may still be treated as having received the money.

A residence includes a primary home or a vacation property you use personally, and the fourteen-day count covers all rental use of that dwelling in the year, including a weekend rented to strangers through a short-term rental platform.

Which Meetings and Events Qualify

The business purpose has to be genuine and provable. Owner or board meetings, annual and quarterly planning sessions, team training days, strategy retreats, and client or referral-partner events all fit, provided the home is genuinely the venue. The question an examiner asks is simple: would this company have paid an unrelated venue for this event? If the honest answer is no, the rent is not a business expense.

The weakest cases involve a single owner holding meetings alone. A solo consultant cannot convert ordinary workdays at the kitchen table into rental days, but a documented annual meeting with advisers or a planning day with contractors stands on firmer ground. Headcount, an agenda, and a start and end time turn an assertion into evidence. Count conservatively: a partial day is a day, and the home's other rental use for the year counts as well.

How to Set a Rental Rate You Can Defend

The rent must be a fair rental value for the space actually used, for the hours actually used. The benchmark is what a comparable venue would charge: a hotel meeting room, a coworking event space, a conference room at an executive suite, or a comparable home rented for a day event. Get written quotes for the same headcount and duration, put them in the file, and set the rate inside that range. A rate a stranger would pay for that room on that day will usually be modest, and it is the only rate that survives scrutiny.

The Records That Survive an Audit

Treat the arrangement exactly as you would a lease with an outside landlord, and build the file in this order.

A day log tracking every rental day for any tenant closes the last gap; it is the only way to prove you stayed under the limit.

Which Entities the Rule Works For

The arrangement requires a tenant that is a separate taxpayer from you. An S corporation, a C corporation, and a partnership or multi-member LLC each file their own returns and can pay rent to an owner for the legitimate use of personal property. A sole proprietorship or a single-member LLC that is disregarded for tax purposes is a different matter. There, you would be paying rent to yourself, and rent paid to yourself is generally not deductible on the business schedule, so the arrangement usually accomplishes nothing. An S corporation election sometimes changes the answer; when an S corporation election makes sense covers the trade-offs.

Texas has no personal income tax, so for a Texas owner the exclusion is purely a federal matter. If you would rather have someone look at the whole owner-compensation picture with you than piece it together alone, the free 30-minute discovery call is designed for exactly that kind of working session.

Where Owners Get It Wrong

The failures are consistent, and each one is avoidable.

• Going over fourteen days. There is no partial benefit. At fifteen days the residence becomes a rental property for the year, all of the income is reportable, and the ordinary rental rules with their expense allocations and personal-use limits take over.
• Pricing from the wrong comparable. Nightly rates for the whole house, luxury venue rates, or a number chosen to hit a target deduction.
• No meeting, or a meeting that would have happened anyway. A family working from home on a normal Tuesday is not renting anything.
• No money moving. A journal entry with no payment, or a payment from a personal account, is not rent.
• Confusing it with the home office. An accountable-plan home office covers regular, exclusive business use of a space; the Augusta rule covers occasional rental of the residence as a venue. Do not claim both for the same space on the same day.
• Reconstructing records after a notice. Contemporaneous documentation is what the rule rewards. Backdated agendas are what examiners are trained to spot.

Keep the rule in proportion. It is one small, legitimate tool in a larger set that includes reasonable compensation, retirement plan design, accountable-plan reimbursements and the ordinary deductions many owners overlook. The line between careful planning and something an examiner will call abusive is the subject of our article on tax avoidance versus tax evasion, and it is worth reading before you sign the lease.

Where MercConsulting Fits

MercConsulting is a boutique business consulting firm in Houston, Texas, organized around five outcomes, and owner compensation planning sits under Minimize Taxation. We look at how an owner is paid as one system: salary, distributions, retirement plan contributions, reimbursements, and rent for legitimate business use of personal assets. Where the Augusta rule fits, we help you set up the lease, the meeting records and the payment routine so the file builds itself, and we coordinate with your CPA, who decides whether the rule applies to your entity and how it is reported. Most of what we recommend we can also build, including the simple meeting-log and document system that keeps this clean year after year.

We are not a CPA firm or a law firm and we do not give tax advice. The rule's application to your facts, the rate and the reporting are your licensed tax professional's decisions; our role is to keep the business side organized enough that those decisions are easy to defend.

Frequently Asked Questions

How many days a year can I rent my home to my business under the Augusta rule?

Fourteen days or fewer in a calendar year, counting every day the residence is rented to anyone, not only your company. A partial day counts as a full day. If total rental use reaches fifteen days, the exclusion is lost for the whole year and all of the rental income becomes reportable under the ordinary rules for rental property, so keep a running log.

Does the Augusta rule work for a single-member LLC or sole proprietor?

Usually not. A sole proprietorship or a disregarded single-member LLC is the same taxpayer as its owner, so the rent is paid to yourself and is generally not deductible on the business schedule. The rule works with a separate taxpayer such as an S corporation, C corporation, partnership or multi-member LLC. Ask your CPA whether an S corporation election changes the answer for you.

How do I decide what rent to charge my business for a meeting at my home?

Use the fair rental value of the space actually used for the hours actually used. Collect written quotes from comparable venues, such as hotel meeting rooms or executive-suite conference rooms, for the same headcount and duration, keep them in your file, and set the rate inside that range. Never use whole-house nightly rates or a figure chosen to produce a target deduction.

Does my company need to issue a 1099 for Augusta rule rent?

Often, yes. Rent paid by a business to an individual above the annual reporting threshold is generally reported on an information return, and the threshold can change, so verify the current rule. Your personal return then shows the rent and the Section 280A(g) exclusion so the income is visibly accounted for rather than appearing unreported. Let your CPA handle both sides.

Can I claim a home office and use the Augusta rule in the same year?

They are different arrangements and can coexist, but not for the same space on the same day. A home office deduction or accountable-plan reimbursement covers a space used regularly and exclusively for business. The Augusta rule covers occasional rental of the residence as a meeting venue. Keep the records separate and have your CPA confirm the treatment for your entity.

This article is for educational purposes only and is not legal, tax, or investment advice. Consult qualified professionals about your specific situation.