Many residents of Augusta, Georgia purchase tickets to the Master’s year after year but have never even attended the famous golf tournament held in their town. That’s because they include the tickets as a bonus to the people who rent their home during this huge annual event.
Each year, owners rent their homes for major premiums during the Masters. Many tax experts believe that this income is tax-free, a rare benefit from a little known provision in the tax code that does not require taxpayers to recognize the income derived from renting their home for less than 15 days per year. See Rental of property also used as home on IRS.gov.
Large sporting events like golf and tennis tournaments, even championship games and other high attendance events can dramatically increase the demand for temporary rental of private residences. Easter weekend on the Emerald Coast comes to mind. It is that annual combination of hold-over snowbirds, spring breakers, regular vacationers and visitors that really stretch our rental accommodations well beyond overload capacity.
Obviously, there are challenges and pitfalls associated with such usage, such as loss of personal belongings and of course, damage! However, getting a monstrously huge premium rental rate accompanied by a significant damage deposit, coupled with tax free status is simply too sweet for some folks to pass up!
You’ll certainly want to discuss this with your tax professional prior to making this decision. You’ll probably also want to get some help from experienced real estate professionals, like us!