Is Home Staging
This is a question that many Home Stagers will answer with a resounding YES! It’s a great selling point, right? But this Professional Home Stager answers that question with a resounding DEFINITELY MAYBE! (Huh?)
As we know, Home Staging has several forms. It can be as simple as an in-home consultation or as arduous as having a Professional Home Stager come in and restyle your home with your own furnishings, those brought in by the stager, or a combination of both. With Home Staging steadily gaining in popularity and necessity, many realtors are including staging as part of their marketing package. No matter what type of staging is accomplished, someone will be footing the bill and this is the person who gets the possible tax deduction.
But who gets the tax deduction or what it should be aren’t decisions that a Home Stager should be making. You wouldn’t go to a dentist to get cooking tips, would you? Nor should you rely on a Home Stager to give you tax tips.
So, we went to straight to a tax professional … Susie Smith at SAS Tax & Accounting, LLC in Pelham, AL to get the right answers.
For Home Sellers:
“The staging costs must be related to the sale of a home and are deducted as selling expenses if the home is actively on the market. The staging cost is deducted as an advertising cost from the gross proceeds of the sale of the home and decreases the total realized profit.” Well, that sounds like home staging is tax deductible, right? Here’s where it gets tricky.
Susie went on to explain “it usually does not come into play 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.” The key word here is “gain”. You cannot deduct a loss on the sale of your home, but you also don’t pay taxes on a gain less than the exclusion amount. If you are fortunate enough to profit this much from the sale of your home, then YES, home staging is an advertising expense that can reduce your taxable profit.
“The realtor could deduct the cost of home staging as a business expense, just as you would do for any other advertising expenses for property that the agent is listing.” Pretty straight forward, right? Home staging is a tax-deductible, advertising expense.
There are a few other caveats that may impact whether or not Home Staging costs are tax-deductible and you should always discuss this with your own tax professional. The simple answer to our question of Is Home Staging Tax-Deductible? is safely “maybe”. But whether Uncle Same helps or not, we know that Home Staging Works and will get the property sold quickly for top dollar. Price it right, stage it beautifully, and market it like the gem that it is … those are the ONLY driving factors you really need for a successful sale.