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Spain’s soccer fans weren’t the only ones happy with the 2026 World Cup. So were U.S. homeowners whose short-term rentals of their residences during the tournament produced nice and tax-free income.
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The 2026 FIFA World Cup ran from June 11 to July 11, with football (soccer to us U.S. residents) matches hosted by 16 cities across the United States, Mexico, and Canada.
We all know that Spain was the big winner on the pitch, taking the World Cup crown from Argentina. But how much did the tournament help the economies of the cities that welcomed international fans?
It depends.
On a macro scale, the results varied.
But one group of Americans did make out like financial champs during the month-long competition. They collected tax-free rent on the short-term rental of their homes in the host cities.
Monetizing sporting events: Those tax-saving landlords aside (and more on them shortly, I promise), the biggest winners were corporations.
Companies involved in the World Cup saw immense profits. Not surprisingly, this sector’s biggest beneficiary was the sport’s governing body, the Fédération Internationale de Football Association.
Some U.S. cities, notably Philadelphia and Kansas City, also reported massive local booms, thanks to surges in consumer spending related to the games there.
Others, however, were disappointed.
Sure, some local businesses, such as bars, hotels and restaurants, got a short-term boost.
But since FIFA monetizes the event globally, host cities and public entities were forced to shoulder most of the financial risk. So they, also known as the hosts cities’ taxpayers, had to cover a plenty of tournament-related costs, such as security, fan transportation, stadium retrofits, and the like.
Tax-free rental income: Some of those taxpayers weren’t concerned with the costs their home governments faced. They were taking advantage of a quirk in federal tax law that exempts from tax money they get for briefly leasing their residential property.
That happens across the United States every tax year when special events are held. Here in the United States, that’s generally for sports, such as the Super Bowl and, at the college level, the NCAA men’s football and basketball championship games.
Here in Austin, there’s a short-term tax-free rental boom when the Lone Star State’s capital hosts South by Southwest (SXSW) and Austin City Limits (ACL) music and more festivals.
And a decade ago, Philadelphians got a double dose of tax-free rental timing luck. The City of Brotherly Love welcomed a visit by then Pope Francis in 2015 and then hosted the Democratic National Convention in the summer of 2016. Since the visits were in two different tax years, the same renters of residences got successive tax breaks.
Here’s a look at how they did it and how you can, too, the next time your hometown is the center of a big event.
Two-week limit: The key to collecting tax-free rental income is brevity of the lease. The payments are tax-free if the property is rented out for no more than two weeks a year.
That limited leasing period is spelled out in Internal Revenue Code Section 280(A), which allows homeowners to exclude rental income collected from leasing their personal residences for less than 15 days.
Fittingly, since sports prompted this post, the tax exclusion law is nicknamed “the Masters Rule.” That comes from the annual professional golf tournament at Augusta National in Georgia, which was, per the tax story, the motivation for the law.
The major downside here is that you cannot deduct any expenses related to the rental. But unless your guests totally trash the place celebrating their team’s win, you’re probably going to come out ahead financially.
Dollars don’t count: Your likely profit will come from what you’ll get for you short-term rental. The good old law of supply and demand tends to mean that these rents are much more than usual during popular special events.
Take, for example, the owner-occupant of a single-family home here in Austin, Texas, who rented her personal abode this spring to a couple in town for SXSW. They were hyped to see Boots Riley’s comedy “I Love Boosters,” hear Alanis Morissette perform, and get thoughts on the current and coming effects of artificial intelligence (AI), and were willing to pay a premium to rent her house which was near the action.
The $10,000 she got from the festival attendees’ for their seven-day stay (hey, it happens!) more than covered her monthly mortgage payment. And she got to pocket all of it, not having to share a cent with Uncle Sam.
Keep track of rental days: That benefit remains as long as the homeowner during the remainder of 2026 doesn’t rent her place for more than another week.
And that’s where another tax rule that still applies comes into play. Yes, tax-savvy readers, I am talking about good record keeping.
If the SXSW short-term landlord exceeds the tax code’s 14 day annual rental maximum, all of her limited lucrative lease income is taxable.
So, in addition to noting the money you’re making, make sure to have good records of when and for how long you rented your personal real estate.
You don’t have to report the short-term rental income to the IRS. But if a tax agency examiner happens to ask, you need to be able to show why the money was tax-free.
More on the federal tax matters can be found at the IRS’ overview in Topic no. 415, Renting residential and vacation property, and in more detail in IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes).
Don’t forget state/local requirements: Also note local taxes that could affect your short-term residential rental.
Most jurisdictions require residential hosts, whether they offer a few short-term or multiple longer-stay leases throughout the year, to register with tax and other governmental authorities before collecting any taxes.
Many states and cites also collect a surtax on all types of rentals.
If you use Airbnb or Vrbo, those companies will offer their clients some tax guidance. But your best move, especially if you are unsure of local or federal tax requirements, is to spend some of your short-term rental money on a tax professional with experience in this area.
A good tax pro can ensure you don’t end up in unexpected residential rental tax trouble.
You also might find these items of interest:
- Airbnb to pay $628 million to settle Italian tax dispute
- Summer home rentals net some owners tax-free income
- World Cup athletes (and others) could face U.S. jock tax bills
- Super Bowl 50 results: NFL wins while host city taxpayers lose
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