Hi,
If you own a business, there’s a way to move $5,000 to $15,000 out of your company and into your pocket every year, completely tax-free. It’s written into the tax code, and most owners either never use it or use it in a way that falls apart the moment the IRS looks.
It’s called the Augusta Rule. Your business rents your home for up to 14 days a year for legitimate meetings, deducts the rent, and you take that income tax-free. The catch is that this only works if it’s built to survive an audit, and that’s exactly where most people get it wrong.
Here’s what actually makes the deduction stand up.
- Fair market rent. You need written quotes from at least three comparable local venues (hotel meeting rooms, coworking, event spaces) and a rate at or below the median. A number you picked because it looked good is a number the IRS will replace with theirs.
- A real business purpose. Actual meetings with an agenda, minutes, and an attendee list. Moving your normal desk work into your living room and calling it a rental day does not count.
- The 14-day cliff. Rent for 14 days or fewer and the income is tax-free. Hit day 15 and every dollar of rent for the whole year becomes taxable. The day-count log is not optional.
- A traceable payment. Business check or ACH, dated to the actual meeting. Round monthly transfers with no meeting behind them are a red flag.
- A separate entity. This works for an S-corp, C-corp, partnership, or multi-member LLC. It does not work for a sole proprietor or single-member LLC, because you’d be renting to yourself.
And if you want more than 14 days a year, don’t stretch the Augusta Rule to cover it. That’s a different play. Renting an office or property to your S-corp year-round is a legitimate self-rental lease with its own advantages – often in the tens of thousands of dollars. In either case, the time to lock it in is now, while the meetings are actually happening.
How We Handle It: We don’t just tell you the rule exists. We build the file that defends it:
- A written memo backed by real market research and three-plus local comparables, setting a defensible rate so your rent isn’t the thing that gets clawed back.
- Documentation Package. Rental agreement, meeting agenda and minutes templates, attendee logs, and a day-count tracker, so every rental day has a paper trail.
- Year-Round Self-Rental Structuring. If you want more than 14 days, we set up a proper lease between you and your S-corp and handle the reporting the right way.
If you’re using the Augusta Rule now, or want to start, reply to this email by Monday next week. We’ll schedule a free 15-minute diagnostic call with our COO and Tax Strategist, Liliya Maksimov, to check whether your setup would hold up and what a compliant version is worth to you this year.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com