The Augusta Rule: How Golf Influenced Legislation and Created a Unique Tax Strategy for Business Owners

Abstract

I.R.C. § 280A(g), commonly referred to as the “Augusta Rule,” is an ideal tax strategy for small business owners. Added to the Internal Revenue Code (“I.R.C.”) in 1976, this statute was in response to a need by homeowners in Augusta, Georgia, who would rent their homes during the Masters Golf Tournament. By following statutory requirements and using “fair market value,” business owners can claim fourteen days of rent from their personal residence as tax-free income and can inversely deduct this rent as a business expense, allowing them to “double dip” from the benefits of the statute.

Keywords: Tax, Internal Revenue Code, 280A, Augusta Rule, Deduction

JEL Classification: K34