CFO Tip: How To Receive Tax-Free Income | Blog

CFO Tip: How To Receive Tax-Free Income? Three words. The Augusta Rule.

What is the Augusta Rule?

The Augusta Rule, known to the I.R.S. as Section 280A, allows homeowners to rent out their home for up to 14 days per year without reporting the rental income on their tax returns. Created to protect residents of Augusta, Georgia, who would rent out their homes to attendees of the annual Master’s golf tournament. The Augusta Rule applies to any taxpayer who owns a home in the United States, provided that your home is not your primary place of business. A good CFO knows this and can guide you in using it to your best advantage. 

How Does it Work for the Homeowner?

So long as the home you own is not your primary place of business, you can rent it out for up to 14 days and not report that income on your tax return. The rent you charge must be reasonable and in line with what the rental market supports; charging $1000 per night when comparable houses rent for $200 per night is not considered reasonable! Homeowners can rent their house to individuals looking for vacation opportunities or rent their house to a business owner who intends to use it for business purposes. A good CFO will be able to answer your questions.

Let us be your CFO. Are you interested in learning more about this? Let’s discuss more in a tax assessment consultation. Book Your Free Tax Assessment Here.