A Tax Break Born on the Golf Course
The “Augusta Rule” is a unique and often-overlooked provision in the U.S. tax code that lets homeowners rent out their personal residence for up to 14 days per year—without having to report the income to the IRS. Its origins trace back to Augusta, Georgia, home of the world- famous Masters Golf Tournament.     Each spring, thousands of visitors descend on Augusta, overwhelming local hotels and creating a surge in demand for short-term housing.  Local residents saw an opportunity to rent out their homes for a tidy profit, but worried about the tax consequences. 

In the 1970s, Augusta homeowners successfully lobbied Congress for relief.  The result was Section 280A(g) of the Internal Revenue Code, which states that if you rent out your home for 14 days or fewer in a year, the income is completely tax-free—and you don’t even have to report it on your tax return.     While the rule was designed for Masters week, it now applies
nationwide.   

How the Augusta Rule Works
– Eligibility: The property must be your primary residence or a second home (not an
investment property or full-time rental).  
– 14-Day Limit: You can rent out your home for up to 14 days per calendar year.   The
days don’t have to be consecutive. If it’s rented 15 days or more, this provision no
longer applies and all the income from renting it becomes taxable rental income.
– No Income Limit: There’s no cap on how much you can earn—just the number of days.  
– No Expense Deductions: You can’t deduct rental-related expenses for those days, but you can still deduct mortgage interest and property taxes as usual.  
– Documentation: Keep records of rental agreements, market rates, and rental dates in case of an audit.   

Popular Uses Beyond Augusta
While the Masters Tournament inspired the rule, homeowners across the country use it to their advantage:
– Major Events: Rent your home during big events like the Super Bowl, music festivals, or conventions when demand and rental rates spike.  
– Vacation Hotspots: Owners in popular tourist areas can rent out their homes for peak weeks and pocket the income tax-free.  
– Business Owners: You can rent your home to your own business for meetings, retreats, or training sessions.    The business gets a deduction, and you get tax-free income (as long as the rent is at market rates and the total is 14 days or less).   
– Family Gatherings: Some use the rule for family reunions or weddings, charging fair market rent for the use of their home.   

Tips for Maximizing the Augusta Rule

– Charge Market Rates: The IRS requires that rent be reasonable for your area and time of year.   
– Plan Around High-Demand Periods: Target dates when rental rates are highest.    
– Use Rental Platforms: Airbnb, VRBO, and similar sites can help document market rates and rental activity. 
– Check Local Laws: Some cities require permits or collect occupancy taxes on short-term rentals.  

Why the Augusta Rule Matters
The Augusta Rule is a rare opportunity to earn tax-free income—whether you’re a homeowner in a small town hosting a big event, a business owner looking to save on meeting space, or simply someone with a vacation home in a desirable location.     With proper planning and documentation, you can take advantage of this historic tax break and keep more of your rental earnings.

Like what you read? Want to know more about YLS in the community? Subscribe below!

Kathryn L Ahlbrand is a SBM YLS council member as well as a Tax Attorney at Varnum LLP.