The Augusta Rule: Free Money in 2024

Sponsored by Marathon Tax of San Ramon

A very underutilized tax-free money option for homeowners is the Augusta Rule, known to the IRS as Section 280A.

This allows homeowners to rent out their home for up to 14 days per year without needing to report the rental income on their individual tax return.

Of course, there are restrictions, and every homeowner’s situation is different, but here are some ideas on how it may be used.

Take a vacation for a total of 14 days out of the year and rent out your home. You may only claim this deduction on your home if the home is your primary residence, is not used for business and you do not rent the home any other time.

The Augusta Rule can be applied to the owner’s primary home, secondary home and vacation home. A mobile home or boat may also qualify as long as it is used as a residence.

For business owners, this is my favorite option. Your unrented secondary home may be rented to your own corporation or partnership for business purposes, 14 days per year, at market rate, tax-free. The 14 days do not have to be consecutive. Proper record-keeping must be done and you should consult your tax/financial advisor for details.

Thanks to the residents of Augusta, Georgia, this tax benefit became a reality in the 1970s when they lobbied to be able to rent out their homes during the Masters Golf Tournament without making their homes a regular rental property.

This article is for informational purposes only and is not intended to be personal financial advice. For questions about the Augusta Rule, contact your personal financial advisor.

Sponsored by Marathon Tax Planning of San Ramon.

 

 

 

 

 

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