There was a great article published by the Times-Herald Record that explains whether staging is tax deductible or not. Below are a few highlights from the article, which can be found in full HERE. (As always, check with your accountant when preparing your taxes.)
“Home sellers can benefit from home staging, as the fees for staging services can be considered as advertising costs according to IRS guidelines. Since a home stager prepares your house for potential homebuyers, the IRS considers the service as an advertising expense, as long as the home stager has been hired for the sole purpose of selling your home. The costs of staging are subtracted from the proceeds of the sale of the home and decrease the total realized profit. In summary, the IRS’ position is that staging costs are a legitimate selling expense for both primary and secondary homes and are therefore tax deductible. However, it is important to note that if a house is staged and then taken off the market, the staging expenses are not tax deductible. Staging is typically what happens after the homeowner has cleaned, painted and made minor repairs. It’s the cost of the stager’s services in dressing up the home to get it ready for sale that are deductible.”
Bottom Line:
“The tax-deductible part is what is on your invoice as the stager. Items that the homeowner buys and intends to keep that are used in the staging process are not deductible, as they are being used for staging and then also for personal use after the staging making them non-deductible. Items they rent for the staging process and then return after the home sells are deductible as part of the staging, as they do not use them for any personal use, they are used strictly for the staging process.”
