How Section 280A(g) lets a business owner rent a personal residence to the company, what a defensible setup looks like in practice, and what the Tax Court did the last time the paperwork was missing.
By Samuel Ortiz, CPA, CVA · Last updated August 22, 2026
The Augusta rule, Section 280A(g) of the tax code, lets a homeowner rent a personal residence out for 14 days or fewer each year and exclude the rent from income entirely, and when the tenant is the owner's own business the company deducts what the owner receives untaxed. The arrangement survives an examination only on its documentation, meaning a rental rate supported by comparable local listings or an appraisal, meetings that genuinely happen, and minutes recorded at the time.
Section 280A(g) has been in the tax code since 1976, and it says something almost nobody believes on first reading: a homeowner who rents out a residence for fourteen days or fewer in a year does not report the rent as income at all. The provision picked up its nickname from Augusta, Georgia, where homeowners renting to Masters tournament visitors for one week a year were its most famous beneficiaries, which is how a statute with no dollar cap and no phaseout came to carry the name of a golf town.
The planning version pairs that exclusion with a business. A company with a genuine reason to meet, a board that actually convenes, a quarterly planning session that actually happens, rents the owner’s home for the day and pays for it the way it would pay any outside venue. The company deducts the rent as an ordinary business expense, the owner receives it, and under 280A(g) the owner excludes it, so the same dollars leave the business deductible and arrive at the owner untaxed. Nothing about that is aggressive and nothing about it is new, it is two ordinary rules doing exactly what they were written to do.
What separates the version that holds from the version that fails lives entirely in the file. The meetings have to be real, which means an agenda someone prepared, business actually conducted, and minutes recorded at the time rather than reconstructed after a letter arrives. The rate has to be defensible, which means comparable listings for meeting space in the same market, or an appraisal, kept on file and supporting what a stranger would have charged for the same room on the same day, because the question is never what the owner feels a day in the living room is worth. And the payments have to match the schedule, fourteen days or fewer, invoiced and paid like rent to any landlord, sitting in books that agree with the return the company will file. That is the whole strategy, a real meeting, a market rate, and a record made at the time, and the case below is what happens when the first two exist only as testimony.
$290,900 in rent moved from an S corporation to its three owners for meetings held in their own living rooms, and the Tax Court allowed $16,500 and described even that as “actually generous.”
Two anesthesiologists and an orthopedic representative owned Planet Fitness franchises in Louisiana through an S corporation. Before 2015 they met at the hospital where they worked or at one of their gyms, and scheduling around three careers was a genuine problem. Then came the plan; the company would rent each owner’s home for a monthly meeting, deduct the rent, and each owner would exclude the income under Section 280A(g), the Augusta rule. Nobody obtained an appraisal, one owner researched meeting space himself, arrived at $1.83 per square foot, applied it to the common areas of their homes, and before long the company was paying each owner $3,000 a month.
The examining agent did the research they had skipped and found that local venues seating 500 to 1,200 people rented for about $500 for a full or half day. He allowed $500 for every meeting they could document, which came to 12 in 2016, 9 in 2017, and none at all in 2015, because no minutes, agendas, or calendars existed. The court found the testimony about the meetings “vague and unconvincing,” credited 12 more meetings for 2015 anyway, and wrote that “it seems that petitioners adopted a tax savings scheme to distribute Planet’s earnings to petitioners through purported rent payments.”
The bill for the case ran to $416,247 in deficiencies across the three households. Interest ran on top, accruing from returns filed as far back as 2015 on a dispute that was not decided until 2023. This was not treated as fraud, it was treated as a real strategy, priced wrong and not documented at all.
Rent your home to your company for 14 days or fewer, at market rate, for meetings that leave a record, and the deduction is valid. The version that ends in the Tax Court is the one where the rate comes from the owner’s own appraisal and the meetings live in nobody’s calendar. The full walkthrough of the decision lives in the Sinopoli case brief for anyone who wants the record in detail.
Ideas do not change your tax number, implementation does, and implementation is books kept current, records made at the time rather than reconstructed later, elections filed on time, and every position reported the way the return will one day have to defend it. That is the year round work a strategy actually requires, and on the strategies we implement we stand behind that work with audit defense. Reading about a strategy is step zero. The record is what decides whether it holds.
It is the common name for Section 280A(g) of the Internal Revenue Code. If you rent out a home you live in for 14 days or fewer during the year, the rent you receive is excluded from your taxable income, and when the renter is a business with a genuine reason to use the space the payments can also be deductible to the company.
The exclusion disappears entirely. At 15 or more rental days the income becomes reportable under the normal rental rules, so the day count is a hard line rather than a phaseout, and every rental day during the year counts toward it, not just the days rented to the business.
By evidence of what an unrelated party would pay for the same use, which for a business meeting usually means comparable local listings for meeting or event space rather than nightly rates for the whole home. In Sinopoli the court accepted the figure the examining agent found for local meeting space, about five hundred dollars for a full or half day, not the roughly three thousand dollars per month the owners had chosen themselves.
A written rental arrangement, a calendar of the meeting dates, agendas and minutes prepared at the time of each meeting, support for the rental rate such as comparable listings or an appraisal, and payments from the business that match the documented schedule. All of it needs to exist before an examination starts, because records reconstructed afterward carry far less weight.
Yes, the arrangement is most common with an S corporation or another separate business entity that has genuine reasons to meet, since the entity deducts the rent and the owner excludes it. A sole proprietor renting a home to his or her own Schedule C activity generally gets no benefit, because there is no separate taxpayer on the other side of the transaction. It tends to suit owners whose businesses genuinely hold board, planning, or shareholder meetings during the year.
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