The Augusta Rule, also referred to as Section 280A(g) of the IRS tax code, allows homeowners to rent out their property for up to 14 days per year without having to report the rental income on their federal tax return.

  This rule can be useful for homeowners who don't want to deal with the ongoing responsibilities of being a landlord but would like to occasionally rent out their property for short-term stays.

  We live in an age of Content Creators finding success in establishing businesses that record volume in Sales and Expenses. The Augusta Rule can benefit a Content Creator who has a relationship with a homeowner such as their parents or siblings. In our example, we highlight a case of a Lifestyle Content Creator and parents as the homeowners. Both parents live separately and are homeowners.

  The Content Creator approaches her mother and then her father and gives them "X" amount of dollars as a gift, (a business deduction classified as rental expenses for the Content Creator business) and tells each one to enjoy their next vacation using the tax free gift, since it doesn't get reported on the parent's Tax Returns. Content Creator tells mother and father, respectively, she would like to use each of their beautiful homes to shoot content and also host an event for a business associate, when each parent travels on vacation.

  Several things occur in this highlighted case; 1) Content Creator is able to deduct the cost of shooting content and hosting events at each of the respective homes, 2) the income is tax free to the mother as long as the time she was gone from her home so it can be rented out is less than 14 days, 3) the income is tax free to the father as long as the time he was gone from his home so it can be rented out is less than 14 days, 4) the "X" amount of dollars gifted is a deduction due to classification as rental expense. 

  The Augusta Rule for Content Creators allows a business owner to save on taxes if carried out effectively. We advise sitting with a Tax Professional or our CPA Firm to further understand how your family and your business can benefit from this tax strategy.