The Augusta Rule Under IRC Section 280A: 14-Day Tax-Free Rental
IRC Section 280A(g) allows a taxpayer to rent a dwelling unit for up to 14 days per year without including the rental income in gross income. The Augusta Rule applies to short-term rental of a personal residence. Combined with cost segregation on a separate investment STR, the Augusta Rule strategy stacks tax-free rental income with cost-seg-amplified losses on other properties.
The 14-day rule
Section 280A(g) excludes rental income from gross income if the dwelling unit is used as a residence (more than 14 days personal use or 10% of rental days, whichever is greater) AND the unit is rented for fewer than 15 days during the year.
The exclusion is automatic for qualifying rentals. No election required. The income simply is not reported as gross income on the return.
Common Augusta Rule applications
Renting the personal residence to a business owned by the taxpayer for board meetings, retreats, or corporate events. The business deducts the rental payment. The individual excludes it under Section 280A(g).
Renting the personal residence to other parties for short stays (Masters golf tournament weeks, Super Bowl, etc.) up to 14 days. The Augusta Rule's name comes from the original Augusta National golf tournament strategy.
Coordination with STR loophole
The Augusta Rule applies to a dwelling unit used as a personal residence. The STR loophole under Reg. 1.469-1T(e)(3)(ii) applies to investment properties not used as a personal residence.
An investor can use the Augusta Rule on their primary home AND the STR loophole on a separate investment STR. The strategies stack: tax-free 14-day rental from the primary home, plus cost-seg-amplified loss on the investment STR offsetting W-2 income.
Frequently asked questions
- How does WeCostSeg coordinate with my CPA?
- Every engagement follows the three-touch CPA Coordination Protocol. Preliminary analysis CC'd to your CPA on intake, draft report shared five business days before final delivery, and Form 3115 filing coordinated when a Section 481(a) adjustment applies.
- Does OBBBA's 100% bonus apply to my acquisition?
- 100% applies to property under a binding contract on or after January 20, 2025 per Public Law 119-21. Property under a binding contract on or before January 19, 2025 stays on the legacy phase-down: 40% in 2025, 20% in 2026, 0% in 2027 and after.
- Is audit defense included?
- Yes. Every WeCostSeg engagement includes five years of written audit defense at no extra charge, aligned to the 13 Principal Elements of a Quality Cost Segregation Study under IRS Publication 5653 Chapter 4.
- Can I get a free preliminary analysis?
- Yes. Submit property details via the free proposal form or WhatsApp. Engineer-reviewed estimate returned within four business hours during US Eastern hours.
Zawwad Ul Sami, Founder
Zawwad Ul Sami is the founder of WeCostSeg, a founder-led cost segregation firm serving real estate investors across the US. He focuses on strategy, pricing, and the firm's overall direction.