The Augusta Rule: Renting Your Torrance Home to Your Own LLC for 14 Days, Tax Free

Published August 10, 2026

Section 280A(g) lets a homeowner rent a residence for fewer than 15 days a year without reporting the income or losing any deductions. For a Torrance owner who wants to rent to their own business, the strategy only works if the business is taxed as a real separate entity, not a disregarded single member LLC.

The short answer

Section 280A(g) lets a homeowner rent out a residence for fewer than 15 days a year, meaning 14 days or fewer, without reporting the rental income and without losing any of the home's normal deductions. The strategy of renting to your own business only works as a real transaction if the business is taxed as a genuine separate entity. A default single member LLC is disregarded by the IRS, so renting to it doesn't create the two sided deduction and exclusion the strategy depends on.

Last verified: August 10, 2026

What the statute actually says

Section 280A(g) of the Internal Revenue Code, titled "Special rule for certain rental use," applies when a dwelling unit is used by the taxpayer as a residence and is "actually rented for less than 15 days during the taxable year." When that threshold is met, two things happen. No deduction otherwise allowable because of the rental use is allowed, meaning you don't get to write off expenses tied to those rental days the way a normal landlord would. And the income from that rental is not included in the taxpayer's gross income at all.

Fourteen days or fewer, and the rent you collect simply isn't taxable income. That's the entire mechanism. It's a narrow, specific statutory carve out, not a general "rent your house occasionally and don't report it" rule. Go to 15 days and the whole exclusion is gone for the year, not just the day that pushed you over.

The provision gets its nickname from homeowners near Augusta, Georgia renting out their houses during Masters Tournament week, but the statute isn't tied to any event. It applies to any residence, including a home in Torrance, rented for any reason, as long as the day count and the residence requirement are both met.

Why "renting to your own LLC" is the part that needs care

The version of this strategy landlords and small business owners hear about most is renting their own home to their own business for a legitimate purpose, a planning retreat, a board meeting, a client event, and having the business deduct the rent as an ordinary business expense while the homeowner excludes the income entirely under section 280A(g).

That two sided result, a deduction on the business side and an exclusion on the personal side, depends on the business actually being a separate taxpayer from the homeowner. Here's where the LLC label causes confusion. The IRS's own guidance on single member LLCs states plainly that a single member LLC is, by default, "treated as an entity disregarded as separate from its owner" for federal income tax purposes, unless it files Form 8832 and affirmatively elects to be treated as a corporation.

If your Torrance rental strategy involves a default, disregarded single member LLC that you own entirely yourself, there's no second taxpayer in the transaction. You can't rent your home to yourself and create a deductible expense on one side and excluded income on the other, because for federal tax purposes it's the same taxpayer paying itself. The rent payment doesn't generate a real deduction anywhere, and the exclusion under 280A(g) has nothing to offset.

The strategy works when the entity paying the rent is taxed as a genuinely separate taxpayer, most commonly a corporation, including an LLC that has elected corporate or S corporation tax treatment, or a multi member LLC taxed as a partnership where you aren't the sole party on both sides of the transaction. In those structures, the entity's rent payment is a real transaction between two different taxpayers for federal tax purposes, and the mechanics of section 280A(g) apply as intended.

Working the numbers

Say a Torrance homeowner's business, taxed as a corporation, rents the homeowner's residence for a legitimate business purpose, four days in the tax year, at $2,500 per day, a total of $10,000.

| Item | Treatment |

|---|---|

| Days rented | 4 (under the 15 day threshold) |

| Rent paid by the business | $10,000 |

| Deduction to the business | Ordinary business expense, subject to normal reasonableness rules |

| Income to the homeowner | $0, excluded under section 280A(g) |

| Deductions the homeowner loses on those days | Any deduction otherwise allowable because of the rental use |

The homeowner reports none of the $10,000 as income. The business, assuming the rent is reasonable and the business purpose is real, deducts it as an ordinary and necessary expense. Cross 15 days in the same tax year and the entire exclusion is lost for that year, meaning all the rental income for every day rented becomes taxable, not just the days past 14.

What actually protects the deduction

Because section 280A(g) itself has no documentation requirement written into the statute, the practical risk isn't the personal side, it's whether the business's rent deduction survives scrutiny as an ordinary and necessary business expense at a reasonable rate. That's a general business expense question, not something specific to this provision. The kind of records that support a reasonable, arm's length rent charge, a written rental agreement, a clear record of the business purpose for each rental day, and some basis for how the daily rate was set, protect the business side of the transaction. None of that is a formal requirement spelled out in 280A(g), and this article isn't citing an IRS checklist that doesn't exist. It's the standard evidence any business expense needs to hold up.

FAQ

Does the 14 day limit reset every year?

Yes. Section 280A(g) applies on a taxable year basis. Each tax year, you can rent the residence for fewer than 15 days and exclude that income, and the count resets the following year.

What happens if I rent the home for exactly 15 days?

The exclusion doesn't apply at all for that year. The statute's threshold is "less than 15 days," so 15 days or more removes the special treatment entirely, not just for the extra day.

Do I need to report the rental on my tax return at all if it qualifies?

The statute excludes the income from gross income, which generally means it doesn't need to be reported as rental income when the fewer than 15 day threshold is met, but confirm the specific reporting mechanics for your return with a CPA.

Can I use this strategy if my business is a default single member LLC I own entirely myself?

Generally no, in the sense that matters for this strategy. A default single member LLC is a disregarded entity for federal tax purposes, so there's no separate taxpayer on the other side of the rental transaction, and the deduction and exclusion split doesn't function the way it does with a corporation, an entity that elected corporate tax treatment, or a genuine multi member entity.

Does the rent I charge my business need to match market rates?

The statute itself doesn't set a fair rental value requirement, but a rent payment your business deducts as a business expense is still subject to the general rule that business expenses must be ordinary, necessary, and reasonable. An inflated rate is a general business expense risk, separate from the 280A(g) exclusion itself.

This is general information, not tax advice. Confirm your entity's tax classification, the reasonableness of any rent charged, and how to document the business purpose with a CPA before you use this strategy.

Topics: taxes, augusta rule, section 280a, torrance, llc

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