The Augusta Rule - Tax Free Rental Income

The Augusta Rule - Tax Free Rental Income
The Augusta Rule is a tax strategy that some business owners can take advantage of to save money for their business while getting a large tax deduction. This rule allows someone to rent out their home tax-free for 14 days or less in a year. Estimated Time to Complete: 5 - 10 minutes.
Which one of these statements best describes you using the "Augusta Rule"

I HAVE RENTED my property for 14 days or less alreadyI WILL BE renting my property out in this tax year for 14 days or lessI have not rented it yet, but would like to learn more
Would you like to learn how this tax saving idea works? Click here to review IRS Tax Topic discussion around Renting residential and vacation property.
When you are ready to utilize this strategy, please reach out to us again to provide some additional details. Click "Go to Next Page" and submit this form so we can note your interest.

PROPERTY INFORMATION: What property was rented?

Answer these questions below and we can help determine your tax strategy
Please provide the address of the property rented

Street Address

Street Address Line 2

CityState / Province

Postal / Zip Code
The property listed above is a PERSONAL PROPERTY (not a rental property)

YesNoUnsure
You indicated this property is a PERSONAL PROPERTY, not a RENTAL PROPERTY. Click on "Go to Next Page" to proceed with the questionnaire.
You indicated this property is a RENTAL PROPERTY. This strategy will not qualify for the August Rule. Click on "Go to Next Page" to page to submit your answers.
NOTE: Only Personal Property - No Rentals allowed! Only personal property can be used for this strategy. You can not use a property that is currently treated as a rental property. Any property rented for more than 14 days in a tax year would not qualify.

RENTER INFORMATION: Who are you renting to?
The Renter of this property is or will be?

An unrelated Individual (not a family member)A related individual/Family MemberA unrelated Business (Corporation/LLC)My own Corporation/LLC
RELATED PARTY: Market Rental Rates and Related Party Rules Please note the following before you use this strategy. ARM'S LENGTH: Be aware that Related Party transactions can be viewed under a bit more scrutiny by the IRS to ensure the transaction is considered an "arm's length" agreement. MARKET RATES: The IRS requires you to use "Market Rental Rates" to determine your daily rental rate. Be certain you have documented how you researched your Market Rental Rate. DOCUMENTATION: Document your transaction with proper lease arrangements and any other necessary rental paperwork. A related party is any person or entity bearing a relationship to the taxpayer. Although not an exhaustive definition, this includes: Family members such as brothers, sisters, spouses, ancestors, and lineal descendants. (Stepparents, uncles, in-laws, cousins, nephews, and ex-spouses are not considered related.)
NOTE: Market Rental Rates! Please note the following before you use this strategy. MARKET RATES: The IRS requires you to use "Market Rental Rates" to determine your daily rental rate. Be certain you have documented how you researched your Market Rental Rate. DOCUMENTATION: Document your transaction with proper lease arrangements and any other necessary rental paperwork.
CORP/LLC: Renting to your Own Corporation/LLC Please note the following before you use this strategy. ARM'S LENGTH: Be aware that rental agreements with your own corporation can be viewed under more scrutiny by the IRS to ensure the transaction is considered to be an "arm's length" agreement. RENTAL RATE: Be certain you have documented a "Market Rental Rate" for the rental rate charged. DOCUMENTATION: Document your transaction with proper lease arrangements and any other necessary rental paperwork. TAX DEDUCTIBLE: Company events for employees, annual picnic or business meetings are allowed and should be documented as such. The property cannot be used for "Entertainment". No deduction is allowed for Entertainment Expense.

DAILY RENTAL RATES: Market Rental Rates
Did you research comparable market rates for rentals in your area?

YesNoNot yet, but will research
PROCEED WITH CAUTION! To proceed with this strategy, it is VERY IMPORANT for you to do research on what market rates would be for your area and the type/size of property used.
Enter the Daily Market Rental Rate for this property.
Select the tax year for this rental activity.
List number of days this property was rented in this tax year.
Enter the TOTAL rents received in this tax year
Was the property listed above rented ANY OTHER TIME in the tax year listed (other than your days listed above)?

YesNo
"Augusta Rule" does not apply unless you have rented your personal property for 14 days or less. For more information on using this tax savings stragegy, CLICK HERE.

DOCUMENTATION: Items needed to document your rental
RENTING TO YOUR OWN CORPORATION: Please answer these questions.
Enter Company Name who Rented this property.
Do you have a signed rental/lease agreement with your Corporation/LLC?

Yes - we have signed agreementNo - we do not have a signed agreement
Do you have a written action documented for your company minutes?

Yes - completedNoI need assistance with this
Describe the purpose of this rental to your own corporation. (Example: Company meeting, Employee event, etc.)
RENTER INFORMATION: Please answer these questions.
Renter Name (Name of unrelated Individual/Business renting)
RELATED PARTY: Please indicate relationship to renter
Do you have a signed copy of the rental agreement?

Yes - we have signed rental agreementNo - we do not have a signed rental agreement
SIGNED AGREEMENT: Keep a copy of your signed rental agreement! The IRS requires you to keep a signed copy of your rental agreement. Keep all documentation regarding invoice/payment. No expenses are allowed to be deducted for this property.
REQUIRED! A signed copy of the rental agreement is required by the IRS. The IRS will require you to keep a signed copy of your rental agreement. Keep all documentation regarding invoice/payment. No expenses are allowed to be deducted for this property.
1099 REPORTING: The IRS will require a Form 1099 to be filed.
The IRS will require you to file a 1099 for rents paid. Please select one of the following.

I will do my own 1099 Filing with the IRSI would like help with filing the 1099 with the IRS (additional fee may apply)

You are almost DONE! Review the two items below. SUBMIT YOUR ANSWERS: Once complete, click "Submit Answers" to transmit your response to our office. Select "Save for Later" if you'd like to edit responses prior to submitting. YOUR ANSWERS WILL BE REVIEWED: We will review your submission and provide the best alternative for you in utilizing this strategy. Thank you for your time in completing this form!
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The Augusta Rule - Tax Free Rental Income

PROPERTY INFORMATION: What property was rented?

RENTER INFORMATION: Who are you renting to?

DAILY RENTAL RATES: Market Rental Rates

DOCUMENTATION: Items needed to document your rental