Named for the Georgia homeowners who rent their houses at spectacular rates during the Masters, the “Augusta rule” — Section 280A(g) — says: rent your home for 14 or fewer days per year, and the rental income is completely tax-free. Not deferred. Not reduced. Excluded.

For business owners, the popular application is renting your own home to your own company for legitimate business events. The company deducts the rent; you receive it tax-free. On 12 meetings at $600, that’s $7,200 moved out of the business deductibly and into your pocket untaxed — call it $2,500+ of real savings at typical rates.

It works. It has also produced a string of Tax Court losses for owners who treated it as free money instead of a transaction. The difference between the two outcomes is entirely procedural, so here is the honest requirements list.

Requirement 1: A real business purpose, actually conducted

Board meetings, quarterly planning sessions, annual shareholder meetings, team retreats, client events, video/content production days. Each event needs an agenda prepared beforehand and minutes or notes produced afterward — contemporaneously, not reconstructed in an audit. “We discussed the business over dinner” is how these cases are lost.

A fair question for a solo owner: can a one-person S-corp hold a meaningful “meeting with itself”? Courts haven’t rewarded thin versions of this. Strategy sessions with your advisors, your spouse-shareholder, contractors, or documented planning days have substance; twelve solo “board meetings” at $1,000 each do not pass the smell test, and smell tests matter.

Requirement 2: A market-rate rent you can prove

This is where the recent court losses concentrated: owners charging $1,000+ per day with no support, in markets where meeting space runs a fraction of that. The rate must reflect what the venue is actually worth for the hours used.

Build the file before paying: quotes or screenshots for comparable local meeting space — hotel conference rooms, Peerspace listings, coworking day rates — matched to your space and duration. A half-day meeting for four people is not priced like a wedding venue. A defensible NJ number is usually in the low-to-mid hundreds, not four figures.

Requirement 3: Treat it like a real transaction

A written rental agreement between you and the entity. Invoices for each event; payment by actual company check or transfer — not a journal entry in December. A calendar trail: 14 days means 14; keep the count. The corporation reports the expense; current guidance and practice on whether a 1099 is issued to you varies — we handle the reporting posture as part of preparation, and the exclusion holds either way when the substance is right.

One more boundary: you cannot double-dip the same space. Rooms claimed under your home office arrangement and rooms rented under Augusta need coherent, non-overlapping treatment.

The honest verdict

The Augusta rule is a modest, legitimate benefit — a few thousand dollars a year for an owner who runs it like a business transaction with a paper trail. It is not the five-figure loophole the courses sell. If your version was installed by a seminar and consists of a spreadsheet and good intentions, have it reviewed before it’s tested for you.

Romanchuk CPA LLC implements the Augusta rule for clients where it fits — documentation templates, rate support, and the discipline that makes it stick. Book a planning session at rfg.tax.

This article is general information, not tax advice for your specific situation.