By Andrew Jones, CPA
January 29, 2019
Tom Brady and the New England Patriots are poised and ready to take on Atlanta-native Sean McVay and his upstart Los Angeles Rams. The “Big Game” is scheduled for Sunday, February 3, 2019, inside Atlanta’s Mercedes-Benz Stadium. Although several high-profile individuals connected to each respective team have ties to the Atlanta area, millions of people will flood into the city and surrounding suburbs to attend some of the hundreds of events put on in coordination with the game on Sunday. The influx of people is certain to bring benefits and drawbacks depending on one’s point of view.
While native Atlantans are wary of the added traffic on top of an already gridlocked system, the influx of visitors can provide significant income potential―tax-free. Rental properties have been at the forefront of many issues at the Internal Revenue Service (IRS). The rule found in IRC section 280A, purportedly stemming from one of professional golf’s biggest events, The Masters, states that a property rented for less than 15 days each calendar year can still be considered a personal residence and any income received for the 14-day period does not have to be reported to the IRS.
Due to the increased demand for visitor housing and the ease in securing property rentals brought about through platforms such as Airbnb and VRBO, residents of Atlanta could earn significant income, tax-free, during this two-week period. While the income is not taxable, expenses are not deductible either and any expenses incurred in relation to the short-term rental activity would be disallowed. While this weekend’s events bring significant opportunity to take advantage of the 14-day rule, it is not limited to certain time periods and taxpayers can take advantage of the rule each year.
Should you have further questions regarding the 14-day rental rule, please contact Andrew Jones, Windham Brannon tax manager, at firstname.lastname@example.org on any reporting requirements.