You have probably seen the video. Some supposed multi-millionaire explains how he bought a Ferrari using a tax strategy involving his house, and the comments are full of people who think they have just found the secret the IRS does not want them to know. That version is total nonsense. But buried underneath the nonsense is a strategy that is completely real, hard-coded into the tax law, and genuinely useful if you run it correctly.
augusta rule
Tik Tok Tax Tips
Does the tax code really say you can rent your house to your own business? Well, it doesn’t say you can’t. So, for years, the Augusta Rule has been one of those strategies with no explicit IRS support. However, two recent Tax Court decisions affirm that it’s kosher, so long as you dot your i’s and cross your t’s.