Excerpts from the Times Herald Record article by Claudia Jacobs
Not too long long ago, friend and staging colleague, Claudia Jacobs wrote about whether or not Home Staging was tax deductible. It was true then and still is . . . here’s why:
- Home sellers can benefit from preparing a home through organizing and staging as the fees are considered “advertising costs” according to the IRS guidelines.
- The cost of organizing and staging are subtracted from the proceeds of the sale, which then decrease the overall total realized profit.
It is important to remember:
- The home stager and/or professional organizer need to be hired for the sole purpose of selling the home.
- Organizing and staging is typically what happens after the homeowner has cleaned, painted and made minor repairs. It is these professionals’ services that strategically prepare the home to get it ready for sale.
- If as part of your services you rent certain items to your seller, which are included in your invoice for your services, and are then retained by you after the organizing and home staging is completed, they will then be tax deductible expenses to the seller.
The bottom line is: the IRS’s position is that staging costs are a legitimate selling expense for both primary and secondary properties and are, therefore, tax deductible. However, it is important to note that if a house is organized and staged, but then taken off the market, preparation expenses will no longer be tax deductible.
Claudia’s last word on this subject?
The staging costs must be related to the sale of a home and are deducted as selling expenses. This may not come into play as much in the sale of a principal residence; if certain conditions are met, a single taxpayer can exclude up to $250,000 of gain, and a joint filer can exclude up to $500,000 of gain.”
Organize and stage the home properly from the beginning. Price it right. Get it sold.
See Claudia’s full article here: http://claudiajacobsdesigns.com/are-home-staging-costs-tax-deductible/