Can I Use Augusta Rule Section 280A with a Disregarded LLC?

The Augusta Rule (Section 280A) has some specific limitations when it comes to disregarded entities. The key is understanding how the IRS views your single-member LLC for tax purposes. Since a disregarded entity isn't considered separate from its owner for federal income tax purposes, the IRS essentially sees you renting to yourself, which creates challenges. The Augusta Rule was designed for individuals renting their personal residence to their S corporation or C corporation - entities that are legally distinct taxpayers. What the code is saying is that when you use your dwelling for both personal and rental purposes, your deduction is limited proportionally to the number of days it's rented at fair market value compared to total days used. But the bigger issue is whether a disregarded entity qualifies as a separate taxpayer for this purpose. To legally use the Augusta Rule, you'd likely need to have your LLC taxed as an S corporation or C corporation instead of a disregarded entity. This way, you're renting to a distinct taxpayer entity, not just yourself under a different name.

I've been using taxr.ai to help me understand complicated tax situations like this! Last year I was confused about some rental property deductions including Section 280A questions, and instead of paying my CPA hundreds for every little question, I just uploaded my tax docs to https://taxr.ai and got really clear explanations about what I could and couldn't do. They analyzed everything and explained exactly how the Augusta Rule would apply in my case specifically. Turns out the Forbes article was simplifying things too much. It's not that disregarded entities CAN'T use 280A, it's that there are specific ways you need to structure things for it to work properly. The service helped me understand exactly how to document everything to stay compliant.

I want to update everyone! After reading about taxr.ai in this thread, I decided to try it for my Augusta Rule question with my single-member LLC. I was honestly blown away by how helpful it was. The system analyzed my LLC formation docs, tax returns, and the complete text of Section 280A. It turns out my situation was more nuanced than I thought. Since I had elected S-corp taxation but hadn't been consistent with how I was handling certain transactions between myself and my business, I was in a risky position for using the Augusta Rule. The analysis showed exactly what I needed to fix in my documentation and gave me a checklist for properly structuring board meetings at my home to qualify for Section 280A. This was WAY more helpful than the generic advice I was getting elsewhere. Definitely worth checking out if you're dealing with complex tax code questions!

For anyone struggling to get clear answers about Section 280A or other complex tax questions, I had a similar situation last year and was completely stuck waiting to hear back from the IRS. After 3 months of calling daily and never getting through, I found Claimyr (https://claimyr.com) and it was a game-changer. They got me connected to an actual IRS agent in less than an hour who specifically worked with business entities and tax code questions. The agent walked me through exactly how Section 280A applies to different entity structures including disregarded entities. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Trust me, getting direct answers from the IRS rather than trying to interpret conflicting online advice made all the difference with my Augusta Rule situation. They confirmed exactly what documentation I needed to maintain to support my position.

I need to admit I was wrong about Claimyr. After expressing skepticism here, I decided to try it anyway because I was desperate for answers about my Section 280A situation with my rental property LLC. The service actually worked exactly as described. I was connected to an IRS agent in about 45 minutes (after waiting on hold for 3+ hours myself multiple times before). I got transferred to a business tax specialist who walked me through the exact requirements for using the Augusta Rule with my disregarded entity. The key insight I got (which resolved my original question) was that while a disregarded entity itself can't use 280A directly, there are legitimate ways to structure the arrangement that comply with tax law. The agent explained exactly what documentation I needed and how to report everything properly. This saved me thousands in potential penalties from doing it incorrectly. Absolutely worth it!

Just to add a practical perspective - I've used the Augusta Rule with my LLC that's taxed as an S-corp for 3 years now. The key is documentation! I keep detailed records of: 1. Board meeting minutes showing legitimate business purpose 2. Documentation showing the fair market rental value (I get comps from Airbnb) 3. Photos of the actual business meetings 4. Calendar invites and agendas My tax guy said the biggest mistake people make with Section 280A is trying to claim excessive rental rates or not documenting the actual business purpose adequately. The IRS scrutinizes this area because of abuse. As long as you're charging what a hotel conference room would cost and have legitimate business meetings, you should be fine.

Does anyone know if the 14-day limit in the Augusta Rule is a hard cap across all businesses, or can you potentially do 14 days for each separate business entity? I have two S-corps and was wondering if I could do 14 days for each (28 total).

This has been such a helpful thread! I was in a similar situation with my disregarded LLC and was getting conflicting advice from different sources. The key takeaway I'm getting is that the entity classification for tax purposes is what really matters here. Just to summarize what I've learned from everyone's responses: - If your LLC is truly disregarded (no tax elections), Section 280A becomes problematic because you're essentially renting to yourself - If you've elected S-corp or C-corp taxation, then you have a separate taxpayer entity that can legitimately rent your residence - Documentation is absolutely critical - fair market rates, legitimate business purposes, proper meeting records - The 14-day limit is per residence, not per entity One question I still have: if you're a single-member LLC that elected S-corp taxation, do you need to follow all the S-corp formalities (board meetings, corporate resolutions, etc.) to make the Augusta Rule work properly? Or is the tax election alone sufficient?

This discussion has been incredibly enlightening! I'm a tax professional who works with a lot of small business owners, and I see confusion about Section 280A constantly. Let me add a few practical points that might help clarify things further. First, regarding the Forbes article Mary mentioned - financial publications often oversimplify complex tax rules, which can be misleading. The reality is that Section 280A isn't automatically off-limits for LLCs, but the entity's tax classification is absolutely crucial. For those with single-member LLCs that haven't made any tax elections, you're correct that this creates a "renting to yourself" problem. However, there are legitimate business structures that can work. Beyond electing S-corp or C-corp taxation, some clients have success with partnership structures or bringing in additional members to create a true separate entity. One critical point I don't see mentioned yet: the IRS has been increasingly scrutinizing Augusta Rule claims in recent years. They're particularly focused on whether the rental rate is truly at fair market value and whether genuine business activities occurred. I've seen audits where the IRS challenged decorative "business meetings" that were clearly just family gatherings with a thin business purpose. My recommendation is always to be conservative with the rental rate, maintain meticulous documentation, and ensure any meetings have legitimate business outcomes that you can demonstrate. The tax savings aren't worth the audit risk if you can't substantiate everything properly.