Technically speaking there is no way to define exactly a server since the word - without specifying exactly the context or restricting it to a specific kind of server - has hundreds or thousands of meanings.
By the way, there's no need to have a static ip address to host an LFS dedicated server since the LFS master server keeps track of the IP addresses of the various LFS servers and feeds them to the connecting clients, so dynamic addresses are fine. The problems may arise somewhere else: limited and unreliable connections and bandwidth, higher ping times, no backup connections or machines. If you want to test the server software, fine, there's nothing preventing it provided the needed TCP and UDP ports are reachable from the clients, but if you think about constantly hosting a server on your domestic connection you may soon find that in most cases a professional and reliable hosting has lots of advantages that won't limit your freedom, differently from a server hosted on a computer at home.