How to use Augusta Rule (Section 280A) through my own LLC for tax benefits

I'm trying to understand how to properly leverage the Augusta Rule (Section 280A) with my own business. From what I understand, this rule lets homeowners rent their home for up to 14 days per year tax-free, meaning no need to report that rental income on personal tax returns. Here's what I'm trying to figure out - if I set up my family members as board members on my LLC, can I then rent my home to the LLC for meetings and other business activities for those 14 days? This way, my LLC could deduct those rental payments as a business expense, while I wouldn't have to report that rental income on my personal taxes. Would this strategy work for reducing both my LLC's taxable income and keeping that rental income tax-free on my personal return (where I report my W-2 income)? Has anyone tried this approach with Section 280A? Just want to make sure I'm understanding the rule correctly before trying to implement anything.

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27 comments

Miguel Alvarez

•8M

Yes, what you're describing is a legitimate tax strategy using Section 280A (Augusta Rule). As a tax professional, I can confirm that business owners often use this approach. The key requirements to make this work: - Your LLC must have a legitimate business purpose for renting your home - You need documentation of actual business meetings/activities - The rental rate must be reasonable/fair market value - Limited to 14 days per year maximum - Proper documentation must be maintained The beauty of this strategy is that your LLC can deduct the rental expense while you receive the income tax-free. Just make sure you have minutes from the board meetings, documentation of business purpose, and a formal rental agreement between yourself and the LLC at fair market value.

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Miguel Alvarez

•8M

This is actually a well-established provision in the tax code, not a loophole or scheme. The key is proper documentation and business purpose. You're right to be concerned about the rental rate - you should research comparable meeting spaces in your area to establish fair market value. For example, what would hotels or conference centers charge for similar space? Document this research. The most important thing is that you must conduct actual legitimate business activities during these rental periods. Take photos, keep detailed meeting minutes, and have clear business outcomes from these meetings. The 14-day limit is strict - don't exceed it or you'll lose the tax-free treatment completely.

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Connor O'Reilly

•8M

I actually stumbled upon a service called taxr.ai (https://taxr.ai) that helped me set up this exact strategy last year. I was super nervous about implementing the Augusta Rule correctly with my LLC, especially with documentation. Their AI analyzed my situation and gave me templates for board meeting minutes, rental agreements, and even helped me establish fair market rental rates for my area. The best part was they reviewed all my documentation before I filed to make sure everything was properly structured. They even gave me guidance on how to track everything for the next tax year. Definitely worth checking out if you're serious about using Section 280A.

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Connor O'Reilly

•8M

The setup process was surprisingly simple. They have a guided questionnaire that asks about your business type, property details, and how you plan to use the Augusta Rule. It takes maybe 15-20 minutes to complete, and you don't need any technical skills. They definitely looked at the specifics of my situation. After the AI generated initial documents, a tax professional reviewed everything and made adjustments based on my particular LLC structure and state regulations. They even identified that my state had some additional documentation requirements for related-party transactions that I wouldn't have known about.

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Keisha Taylor

•8M

Just wanted to follow up about taxr.ai - I was skeptical but decided to try it after seeing this thread. I'm honestly impressed. I used it to set up my Augusta Rule strategy for my marketing consultancy, and they caught several issues I wouldn't have thought about - like the fact that I needed specific language in my operating agreement to allow for board meetings. They helped me calculate the right fair market value rental rate with actual comparable properties in my area (turned out I was going to undercharge significantly). The documentation they helped me create is way more comprehensive than what I would have done on my own. Definitely turned me from a skeptic to a believer!

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StardustSeeker

•8M

If you're implementing the Augusta Rule, make sure you can actually get through to the IRS if you have questions or if (god forbid) you get audited. I use Claimyr (https://claimyr.com) whenever I need to talk to the IRS about business tax questions. Was struggling to get answers about Section 280A specifically and kept getting disconnected after hours on hold. Claimyr got me connected to an actual IRS agent in about 20 minutes who confirmed my Augusta Rule implementation was correct. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Honestly saved me weeks of stress wondering if I was doing it right.

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StardustSeeker

•8M

It works by using their system to navigate the IRS phone tree and wait on hold for you. When an agent actually picks up, you get a call back connecting you directly. It's not "skipping the line" - they're just handling the hold time so you don't have to waste your day. They have some kind of technology that prevents disconnections which is what usually happens when you've been on hold too long. For my Augusta Rule questions, I submitted my request in the morning, went about my day, and got connected to an IRS agent during lunch. The agent was able to confirm my specific situation with my LLC qualified under Section 280A.

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Amina Bah

•8M

I have to eat my words about Claimyr. After dismissing it as BS, I was stuck with a question about Section 280A documentation requirements that I couldn't find a clear answer to online. Decided to try it as a last resort before paying my accountant for another consultation. Got connected to an IRS agent in about 25 minutes (was quoted 2+ hour wait time when I tried calling directly). The agent walked me through exactly what documentation I needed for my LLC to rent my home under the Augusta Rule. Turns out I was overthinking it - basic meeting minutes, a rental agreement, and proof of payment is sufficient. Saved me both money and stress. Sometimes being wrong feels pretty good!

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Oliver Becker

•8M

One thing nobody's mentioned yet - make sure you're actually holding legitimate business meetings during those 14 days. I got audited last year (not for this specifically) and the auditor asked detailed questions about my Augusta Rule usage. They wanted to see: - Meeting agendas - List of attendees - Business decisions made - Photos of the meeting - How the meeting benefited the business Don't just say you had a "strategy meeting" - document specific business discussions and decisions. And definitely don't count family dinners or personal events as "business meetings" even if you briefly discuss business.

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Oliver Becker

•8M

For a single-member LLC, it's more challenging but still possible. The IRS might scrutinize it more closely since there's higher potential for abuse. You'd need to demonstrate you're truly using the space for business purposes that couldn't be conducted at your normal office. Document extensive business planning with detailed outputs - new marketing plans, business strategy documents, financial projections, etc. Consider bringing in consultants, potential clients, or vendors for meetings to strengthen the business purpose. The key is showing that renting your home was necessary for legitimate business purposes rather than just a tax play.

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PixelPioneer

•5M

Great thread everyone! I've been considering this strategy for my consulting business but had one concern - what happens if the IRS challenges the "fair market value" determination? I've seen rental rates for meeting spaces vary wildly in my area depending on amenities, location, etc. Should I be getting formal appraisals of my home's rental value for business meetings, or is researching comparable venues sufficient? Also, does anyone know if there are specific record-keeping requirements beyond what's been mentioned? I want to make sure I'm bulletproof if this ever gets scrutinized. The taxr.ai suggestion sounds interesting - might be worth the investment just for peace of mind on the documentation side.

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Mason Davis

•5M

You definitely don't need formal appraisals - that would be overkill and expensive. Researching comparable venues is sufficient and actually preferred by the IRS since it shows you made a good faith effort to establish fair market value. I'd suggest creating a simple spreadsheet documenting your research: hotel meeting rooms, conference centers, coworking spaces in your area with similar capacity/amenities. Screenshot their rates and save the data with dates. This creates a paper trail showing your rental rate was reasonable. For record keeping beyond what others mentioned, also keep: receipts for any supplies/refreshments provided during meetings, photos showing the business setup of your space during rental periods, and copies of any presentations or materials used. The key is showing this was genuine business use, not just a tax strategy. The documentation piece is really where services like taxr.ai can help - they know exactly what the IRS looks for in audits and can help you create that bulletproof paper trail from day one.

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Jibriel Kohn

•5M

This is incredibly helpful! I've been hesitant to try the Augusta Rule because I wasn't sure about all the documentation requirements, but reading through everyone's experiences gives me more confidence. One follow-up question - for those who have implemented this successfully, how do you handle the timing? Do you plan all 14 rental days at the beginning of the year, or can you be more flexible and use them as needed throughout the year? I'm thinking it might be better to space them out rather than doing them all at once, but I want to make sure there aren't any timing restrictions I'm missing. Also, @Miguel Alvarez, when you mentioned keeping meeting minutes - do these need to follow any specific format, or is it just important that they exist and document legitimate business discussions?

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Abigail bergen

•4M

Great questions! For timing, you have complete flexibility - there's no requirement to plan all 14 days upfront or space them evenly. I typically use mine as needed throughout the year based on business requirements. Just make sure you track your usage carefully so you don't accidentally exceed the 14-day limit. Regarding meeting minutes, there's no specific IRS format required, but they should include the basics: date, time, attendees, agenda items discussed, decisions made, and action items. Think of it like any legitimate business meeting - you want to show real business was conducted, not just a social gathering. I'd also suggest taking photos of your space set up for business use during each rental day - whiteboards with notes, presentation materials, business documents spread out, etc. This visual documentation can be really valuable if you ever need to prove legitimate business use. The flexibility of the Augusta Rule is actually one of its best features - you can adapt it to your business needs rather than being locked into a rigid schedule.

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Javier Mendoza

•2M

Thanks for all the detailed information everyone! As someone new to business ownership, I had no idea the Augusta Rule even existed until I saw this thread. The strategy of using my LLC to rent my home for legitimate business meetings sounds like it could really help with tax savings. I'm particularly interested in the documentation aspect that several of you have mentioned. It sounds like the key is treating this as a genuine business arrangement rather than just a tax strategy, which makes sense. The idea of researching comparable meeting space rates and maintaining proper records seems straightforward enough. Has anyone here actually been audited specifically on their Augusta Rule usage? I'd be curious to know what that experience was like and whether having thorough documentation really made the difference. Also, for those using services like taxr.ai, do they provide ongoing support throughout the tax year or is it more of a one-time setup? This thread has been incredibly educational - definitely going to look into implementing this for my consulting business next year!

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Omar Fawaz

•2M

Welcome to business ownership! The Augusta Rule is definitely one of those "hidden gems" in the tax code that many new business owners don't discover until later. You're smart to be thinking about proper documentation from the start. I haven't been audited specifically on Augusta Rule usage, but I know someone who was, and having thorough documentation was absolutely crucial. The IRS agent spent significant time reviewing meeting minutes, photos, and business outcomes to verify legitimate use. Their advice was that over-documentation is better than under-documentation - you can always provide less if needed, but you can't recreate records after the fact. Regarding ongoing support, most services I've seen (including taxr.ai based on what others have shared) typically provide templates and initial setup, but you'll want to confirm if they offer year-round guidance. The key is establishing good habits early - consistent record-keeping throughout the year rather than scrambling at tax time. One tip: consider creating a simple checklist for each rental day that includes all the documentation you need to collect. Makes it much easier to stay organized when you're actually conducting business rather than trying to remember everything later!

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Noland Curtis

•2M

This is such a valuable discussion! As someone who's been running a small consulting firm for a few years, I wish I had known about the Augusta Rule earlier. Reading through everyone's experiences, it's clear that proper documentation is absolutely critical. One thing I'm curious about - for those of you who have successfully implemented this, how do you handle the business expense side on your LLC's books? Do you categorize it as "meeting room rental" or something more specific? I want to make sure I'm accounting for it correctly on both the business and personal sides. Also, has anyone dealt with state tax implications? I know the 14-day rule applies federally, but I'm wondering if some states have different rules or if there are any state-specific considerations I should be aware of. The documentation checklist idea that @Omar Fawaz mentioned is brilliant - I'm definitely going to create one of those. It seems like the key is treating this as seriously as any other business transaction, which makes perfect sense from a compliance standpoint.

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Everett Tutum

•23d

Great questions about the accounting side! For the LLC books, I typically categorize it as "Meeting/Conference Room Rental" or "Business Meeting Expenses" to be clear about the business purpose. Make sure you have a proper invoice from yourself to the LLC and that the LLC cuts an actual check or bank transfer - don't just do journal entries. You want a clear paper trail showing real money changing hands. On state tax implications, most states follow federal treatment, but you're right to check. Some states have additional documentation requirements for related-party transactions. I'd definitely recommend consulting with a local tax professional or using a service that understands your state's specific rules. The checklist approach is really the way to go. I include items like: meeting agenda prepared, attendees confirmed, space set up photographed, meeting minutes template ready, business outcomes documented, receipts collected for any expenses. Makes each rental day much more organized and audit-ready from the start.

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Lilah Brooks

•16d

This has been an incredibly informative thread! As someone who's been running a small marketing agency for about 18 months, I had heard whispers about the Augusta Rule but never really understood how it worked in practice. Reading through everyone's experiences has been eye-opening. What strikes me most is how much emphasis everyone places on legitimate business purpose and thorough documentation. It's clear this isn't just a "set it and forget it" tax strategy - it requires ongoing attention to detail and genuine business activities. The documentation checklist idea and the emphasis on treating this as a real business transaction (with actual invoices and payments) makes perfect sense from a compliance perspective. I'm particularly interested in the point about researching comparable meeting spaces to establish fair market value. In my area, there's a huge range depending on the venue type and amenities, so having that research documented upfront seems crucial for justifying the rates. One question for those who've implemented this - do you find it changes how you plan your business meetings throughout the year? I'm wondering if having this 14-day limit makes you more strategic about when and how you use your home for business purposes versus meeting elsewhere. Thanks to everyone who shared their experiences and resources. Definitely going to explore this further for next tax year!

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