Articles

Today I want to talk about the quick question, “Can I rent my home to my business tax free?” The answer is not straightforward. It takes time to look at the specific set-up of that taxpayer’s business. It requires a bit of research. You need to know things like:
● What’s the fair market value of renting your home?
● How many days will you rent your home to your business?
● Can we substantiate that this rental is ordinary and necessary?

Amber Gray-Fenner already did an excellent job of explaining the Augusta Rule in an earlier issue of the newsletter. So, I won’t go over all the same points. I want to look at what the Augusta Rule is and how it came about. Then, we’ll look at three takeaways for you to remember in your practice and give to your clients.

Albert Lauber, my favorite Tax Court judge, gave us an opinion in February that paints a detailed picture of the workings of a syndicated conservation easement. In the end, he supports the findings of the Senate Joint Finance Committee that the engine of these abusive transactions is an inflated appraisal. In November, David Gustafson issued an opinion that exposed the financial engineering techniques that promoters engaged in. We’ll take a look at those, but first I would like to give you an overview, because we may need that to figure out the lessons to be learned.