Buried in the tax code is one of the few genuinely free lunches available to ordinary homeowners: rent out your home for fewer than 15 days in a year, and the income does not have to be reported at all. Not taxed at a lower rate. Not reported. The IRS spells it out in Tax Topic 415: if you use a dwelling as a residence and rent it for fewer than 15 days during the year, you do not report any of the rental income, and you do not deduct any rental expenses.
People sometimes call it the Augusta rule, after the Georgia city where homeowners have long rented their houses to visitors during the famous golf tournament each April and pocketed the money tax free. But you do not need a major event in your backyard to use it. A spare room during a nearby festival, your whole house while you visit family for two weeks, a driveway apartment during a big game: if the days stay under 15, the dollars stay off your return.
How the rule actually works
The rule sits inside the tax code’s treatment of dwelling units used as a home, which IRS Publication 527 covers in detail. Two conditions have to be true. First, the property must qualify as your residence for the year, meaning you personally use it for more than the greater of 14 days or 10 percent of the days it is rented at fair market price. For a primary home you live in year-round, that test takes care of itself. Second, the total days rented to others at a fair price must be fewer than 15 for the entire calendar year.
Meet both, and the tax consequences vanish in both directions. The income is excluded, and the flip side is that you cannot deduct rental expenses like cleaning, listing fees, or a share of utilities against it. You do keep your normal homeowner deductions, such as mortgage interest and property taxes if you itemize, exactly as if the rental never happened.
Day 15 changes everything
This is a cliff, not a slope. Rent for 14 days and the income is invisible. Rent for 15 days and every dollar of rental income for the year becomes reportable, from day one, not just the days past the line. At that point you enter the ordinary vacation-home rules: income goes on Schedule E, expenses get split between personal and rental use based on days, and deductions for the rental portion may be limited when the property doubles as your home.
So the day count deserves real attention. The 14-day limit applies per dwelling unit per year, and it counts days actually rented at fair value, not days listed. A calendar or a simple spreadsheet noting each booked night is all the recordkeeping the rule demands, and it is exactly what you would want in hand if a question ever arose.
What counts as a day, and what does not
Days you rent to someone at less than fair market price do not get the rule’s protection; they are treated as personal use days instead, and the income picture gets murkier. Renting to your employer, your own business, or a relative at a made-up premium price also invites scrutiny: the exclusion assumes a fair market rent, the kind an unrelated stranger would pay for a comparable place at the same dates. During a marquee event, fair market rent can genuinely be several times the normal rate, and that is fine. Charging your own company ten times the going rate for a Tuesday in March is a different story, and it is the version of this rule that shows up in audit cases.
If a 1099-K or platform form shows up anyway
Hosting platforms and payment apps may report your payouts to the IRS depending on the reporting thresholds in effect, and a form can arrive even for income the 14-day rule excludes. A form does not make excluded income taxable; the rule does not have an asterisk for paperwork. But an unexplained mismatch between a reported form and a return that shows nothing can generate an IRS notice, so keep your day-count records and documentation showing the rental met the exclusion. The IRS guidance on understanding Form 1099-K covers how these forms relate to what is actually taxable. Platforms may also withhold or require tax information regardless of your eventual treatment, which is a compliance matter on their end, not a change to yours.
Where the rule fits in a normal household’s plans
The 14-day rule rewards the occasional, opportunistic rental, and it pairs naturally with events that spike local demand: tournaments, graduations, concerts, conventions. A homeowner near a college can cover a mortgage payment or two on graduation weekends alone, tax free, every single year. What the rule does not do is scale. It is not a loophole for running a short-term rental business quietly, because the 15th day converts the whole year’s income to reportable, and platforms leave a clear trail.
One last practical note: tax free at the federal level does not always mean paperwork free locally. Many cities and counties require short-term rental permits or collect lodging taxes even for brief stays, and those rules apply regardless of the federal exclusion. Check your local government’s requirements before listing. Handled cleanly, though, this is that rare corner of the tax code where the friendly-sounding summary is the actual truth: under 15 days, keep the check, skip the tax return entry, and enjoy the free lunch.
