03. IRC Citations & Overview
IRC Citations & Overview
The Augusta Rule is codified in Internal Revenue Code §280A(g).
It states that if a dwelling is used as a residence and rented for fewer than 15 days during the year, the income from that rental does not have to be reported on the taxpayer’s return — and is not taxable.
However, it also says that no deductions may be taken for rental-related expenses (mortgage, utilities, etc.) for those 14 days.
🧾 Primary IRC References
IRC §280A(g) – Income Exclusion for Short-Term Rentals
“Notwithstanding any other provision of this subtitle, if a dwelling unit is used by the taxpayer as a residence and is actually rented for less than 15 days during the taxable year, then— (1) no income derived from such use for the taxable year shall be included in gross income, and (2) no deduction otherwise allowable under this chapter because of the rental use of such dwelling unit shall be allowed with respect to such use.”
🔗 Full Text – Cornell Law: IRC §280A(g)
IRS Publication 527 – Residential Rental Property
This IRS publication includes:
“Special rule for minimal rental use”
Instructions to not report income for <15-day rentals
A prohibition on deducting any associated expenses
IRS Topic 415 – Vacation Rental & Minimal Use Rules
Clarifies the “less than 15-day” rule and reminds taxpayers that no expenses can be deducted during that time.
✅ Summary
If:
You use the home personally
You rent it for 14 days or less in the year
You follow proper documentation...
Then:
The income is not taxable
But you also can’t deduct any of your home expenses for those days
Last updated