The 14-Day Rule: Rent Your Home Tax-Free (What STR Hosts Need to Know)
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IRC §280A(g) contains one of the most straightforward tax exclusions in the code: rent your personal residence for 14 days or fewer per year, and the income is completely tax-free — no reporting required. The tradeoff is that rental expenses are not deductible, and most dedicated STR hosts don't qualify because they rent far more than 14 days annually.
The Full §280A(g) Vacation Home Exclusion
The Code is unusually clear here. Under IRC §280A(g), a dwelling unit that is used by the taxpayer as a personal residence is treated as if it were not rented if:
- The unit is rented at a fair rental price for fewer than 15 days during the taxable year
- The taxpayer uses the unit as a personal residence (more than 14 days of personal use, or more than 10% of rental days)
When these conditions are met, the rental income is excluded from gross income under §61. It is not reported. It is not taxable. The IRS gets nothing.
You live in your home full-time and rent it for 10 nights during a major sporting event at $1,000/night = $10,000. Because you rented for fewer than 15 days and personally use the home year-round, the full $10,000 is tax-free. At a combined 37% marginal rate (federal + state), that's $3,700 in tax savings compared to fully taxable income.
What Counts as Personal Use
Personal use days are broader than just nights you sleep there. They include:
- Any day you or your spouse personally uses the unit
- Any day a family member (parent, sibling, child) uses it — even if paying fair market rent
- Any day you allow anyone else to use it at less than fair rental value
- Any day received through a home swap or exchange arrangement
Days you spend doing repairs and maintenance do not count as personal use. A weekend spent fixing the HVAC does not reduce your personal use day count.
What Counts as Rental Days
Rental days are days you rent the property at a fair rental price to unrelated parties. If you rent to a family member at market rates, those days still count as personal use, not rental days. The "fair rental price" requirement means you cannot charge below-market rates and claim rental days.
Renting for exactly 15 days completely eliminates the §280A(g) exclusion. All 15 days (not just the 15th) become taxable. The line between 14 and 15 rental days is absolute. If you plan to use this rule, track your rental days carefully and stop listings after 14 bookings.
The Augusta Rule: S-Corporation Strategy
The §280A(g) exclusion is sometimes called the "Augusta Rule," named for homeowners near Augusta National Golf Club who rent to Masters golf tournament attendees. The name has taken on additional meaning in tax planning circles as a strategy for business owners.
The S-corp Augusta Rule strategy works as follows: an S-corporation owner rents their personal home to their S-corporation for business meetings or retreats at fair market rates. The S-corp deducts the rent as a business expense. The owner excludes up to 14 days of that rent from personal income under §280A(g).
This strategy is legitimate when executed properly but carries significant IRS scrutiny risk:
- The rental must be at a genuinely fair market rate for the specific space and purpose
- The meetings must actually occur and be business-related
- Documentation of the meetings must be thorough
- The IRS may challenge the fair market rate determination
The S-corp Augusta Rule strategy requires careful execution to avoid recharacterization by the IRS as a sham transaction. Do not implement this strategy without working with a qualified CPA who has experience with business owner tax planning. The downside risk includes penalties and interest that can exceed the tax savings.
Why Most Dedicated STR Hosts Don't Qualify
The 14-day rule is simply not designed for hosts who operate their property as a rental business. If your property is listed on Airbnb 200+ days per year and you actively seek bookings, you will almost certainly exceed 14 rental days. The exclusion applies to:
- Homeowners who rent their home during one or two major local events per year
- Second-home owners who rent occasionally while primarily using the property personally
- Homeowners testing the rental market before deciding to list more actively
The moment your rental days hit 15, you're out of the exclusion entirely. For active STR operators, the tax advantages come through deductions, depreciation, and the STR loophole for losses — not the 14-day exclusion. See our complete guide to Airbnb tax deductions for the full picture.
The Flip Side: Once You Exceed 14 Days
When your rental days exceed 14 (but you still have significant personal use), you enter the vacation home rules under §280A(e). Deductions must be allocated between personal and rental use based on the ratio of rental days to total days used. Losses from the rental portion may be limited. This is a more complex calculation — consult our guide on how the IRS treats different rental types for more detail.
Track Your Rental Days and Personal Use Days Precisely
DeductFlow tracks your booking history and personal use calendar so you always know where you stand relative to the 14-day rule and vacation home thresholds.
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Disclaimer
This article is for informational purposes and does not constitute tax, legal, or financial advice. Tax rules vary based on your specific situation, filing status, entity structure, and jurisdiction. Always consult a qualified CPA or tax professional for guidance on your specific tax situation. IRS rules and thresholds are subject to change — verify current requirements at irs.gov before filing.