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ARTICLE · 25 FEBRUARY 2026

Understanding The Internal Revenue Code's "Augusta Rule"

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This article explains the "Augusta Rule" under § 280A(g) of the Internal Revenue Code, including how to qualify, common pitfalls for S corporations...

United StatesTax
Jacqueline Feliciano
Jacqueline Feliciano

Understanding the Internal Revenue Code's "Augusta Rule"

This article explains the "Augusta Rule" under § 280A(g) of the Internal Revenue Code, including how to qualify, common pitfalls for S corporations, and best practices for documenting use to mitigate noncompliance risks. 

What Is the Augusta Rule?

The "Augusta Rule," codified in § 280A(g) of the Internal Revenue Code, explains that if a dwelling unit is used as a residence and rented for up to 14 days, the owner can exclude that rental income from their taxable income. The rule is commonly used for short, event-driven rentals and applies to a house, apartment, condominium, mobile home, boat, or similar property that provides basic living accommodations.

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