The Augusta rule is the common name for Internal Revenue Code section 280A(g). If you use a dwelling unit as a residence and rent it out for fewer than 15 days during the year, you do not report the rental income and you do not deduct any expenses as rental expenses. IRS Topic No. 415, Renting Residential and Vacation Property, states the same rule in plain language.
The name comes from homeowners near Augusta, Georgia renting during the Masters. Nothing in the statute is about golf or any particular city — it applies to any residence rented for fewer than 15 days.
The business-owner application: rather than renting to strangers, the owner's own business entity rents the owner's home for genuine business use (a board meeting, a planning day, a retreat). The entity deducts the rent as an ordinary and necessary expense under section 162; the owner excludes the payment under 280A(g). Both halves must hold independently — if the rent is not an ordinary and necessary business expense, the deduction fails no matter how carefully the day count was kept.
Who can use it:
| Structure | Can it work? | Why |
|---|---|---|
| S corporation | Yes | A separate taxpayer that can contract with and pay its owner |
| C corporation | Yes | Same — a separate entity paying rent to an individual |
| Partnership | Yes | Separate entity; related-party rules are worth reviewing |
| Multi-member LLC | Yes | Taxed as a partnership by default, so a separate entity |
| Sole proprietor | Generally no | No second party — you and the business are the same taxpayer |
| Single-member LLC (disregarded) | Generally no | Disregarded federally, so the same problem |
The sole-proprietor answer is the most common misunderstanding: you cannot rent property to yourself, because a rental needs two parties.
The four conditions:
- Fewer than 15 rental days for that residence in the year — count every rental day, including any to third parties.
- A real business purpose for each day, one that would have needed a venue anyway.
- A fair market rate for comparable space, evidenced before the event. The IRS publishes no rate for this.
- The business actually pays, and both sides record it.
The documentation trail (per event): a written rental agreement between owner and entity; an agenda and minutes showing the business conducted; an attendee list; comparable-rate evidence dated before the event; an invoice from the owner to the business; proof of payment; and the rent expense in the business's books with the invoice attached.
What goes wrong: reaching 15 days removes the exclusion for the whole year, not just that day. Rates set after the fact have no evidence behind them. Missing minutes leave nothing distinguishing a board meeting from a weekend at home. A single-person entity holding a single-person meeting is the hardest version to support.
Home office interaction: the same space on the same days cannot be both a home office and a venue rented to your business. How to handle both is fact-specific — confirm with your tax professional before claiming both.
Reporting: income excluded under 280A(g) is not reported as rental income, and no rental expenses are deducted against it — the exclusion and the lost deductions come together. The entity may still issue a Form 1099-MISC for rent depending on the amount (the rent reporting threshold rose to $2,000 for payments made after December 31, 2025).
What ExpenseBot does here: it captures the invoice and the proof of payment into your expense sheet with the document linked to the row, so an expense that depends on its paperwork keeps the paperwork attached. ExpenseBot does not "do the Augusta rule", does not decide whether it applies to you, and does not set a rate.
Estimates — confirm with your tax professional. This describes what the provision says; whether it applies to your situation is a question for your own adviser.
See also: The Augusta rule explained, Is a home office tax deductible?, Expense audit trail.