Can you rent out your basement? What about your Airbnb or a mother-in-law suite? In this video, tax attorney John Hyre breaks down what the IRS actually considers a “dwelling” under Section 280A(g)—and how far you can stretch the rules before it backfires.
We’ll cover:
The 3 essential features every qualifying dwelling must have
Whether you need to own the property
How mother-in-law suites and separate units factor in
Why documentation still matters
If you’re using the Augusta Rule (or want to), this is a must-watch.
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where you can sleep prepare meals and
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well um get rid of the meals so it has
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to have cooking and toilet facilities as
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well as sleeping facilities and it has
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to be real the IRS is actually based on
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some old proposed regs that we’re
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following pretty liberal about it but
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let’s not get crazy crazy maybe a little
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crazy but not too crazy for example if
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you have a sleeping bag a bucket and an
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MRE from the military that you can cook
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on its own and you throw it under a tent
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is that going to qualify that might be
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pushing it a bit but they are pretty
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liberal for example it’s pretty clear
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that the code doesn’t require that you
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own it i’m a believer as a tax attorney
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if it’s not banned it’s allowed they
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never put a requirement saying you have
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to own it so if you rent for example an
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apartment can you rent it out for
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Augusta rule purposes yes as long as it
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has what eating facilities toilet
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facilities and sleeping facilities
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finally your home or condo might have
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more than one dwelling unit for example
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if you have the classic mother-in-law
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suite what is that it might be the
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basement it might be part of the
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structure it doesn’t have to be separate
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from the building it could be a duplex
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for example but if you have let’s say in
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the basement a separate place that has
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its own eating facility toilet facility
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sleeping facility and it’s got a little
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bit of separation a door or something
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that separates it from the other
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dwelling unit the rest of the home this
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would be your classic mother-in-law
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suite you actually have two dwelling
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units in the same structure
