You assume every dollar that moves from your business to you gets taxed on the way, whichever pocket it lands in. An accountant whose firm works only with real estate businesses says there is a rule that lets your entity pay you rent for up to 14 days a year with no tax on that income, and that the whole thing stands or falls on documentation you have to create at the time.
He is walking a room of agents through the tax strategies he says the ordinary CPA down the street never brings up, and he files this one under what he calls the low-hanging fruit — the ones he says everybody should be doing right now.
What it is: "the Augusta rule is where you rent your personal home to your business for up to 14 days a year," and by his account the rent your business pays you comes to you tax free.
What you charge: "you just find what the neighborhood rate is for rentals in your area, charge yourself a fair market value on that." He notes a day rate in Malibu is not a day rate in Pittsburgh, and that is fine — you use your own market.
How the money has to move: "Make sure your business entity pays your personal account, that way you have clear transaction that they actually happened." Not a journal entry. An actual payment from the business account to your personal one.
What has to actually happen in the house: real business. He names "hosting clients, hosting team parties, team trainings, annual plannings." And the line the whole thing hangs on — "You just got to actually document the meeting and make sure it happens in your house."
When to do it: he told an August audience there was still plenty of year left, and warned against being the person "trying to sneak that in" at the very end of December.
“the Augusta rule is where you rent your personal home to your business for up to 14 days a year”
Most agents already hold the meetings. The team training in the living room, the client appreciation thing on the deck, the annual planning session at the kitchen table — those happen every year and nobody writes them down anywhere. The money is not in doing something new. It is in recording something you were doing anyway, and paying yourself for the room.
The failure mode is obvious and it is the documentation, not the idea. A payment with no meeting behind it, or a meeting with no record of it, or rent you set by feel instead of by what comparable space rents for near you. Get the rate from real listings, put the meeting on the calendar with an agenda, and let the business account pay your personal account so there is a transaction to point at. Run the specifics past your own accountant before the first payment.