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Question: Denzel and Devan are looking forward to the upcoming football season. Due to the proximity of their residence to the stadium, they make extra money by renting out a spare room in their home for the eight regular home games and two pre-season games for $200 per night. How do they report this $2,000 in rental income for the year on their tax return?

Answer: Under IRC §61, gross income means all income from whatever source derived, unless there is an exception. Since they are renting out their property for less than 15 days during the year, the short-term rental income is exempt from income tax under §280A(g)(1), commonly referred to as the “Augusta rule” after the Masters golf tournament in Augusta, GA. Therefore, this income does not need to be reported on Schedule 1, nor Schedule E, of their Form 1040, U.S. Individual Income Tax Return.