Yes, staging costs are tax-deductible but only if they are incurred in connection with the transaction of putting the property back on the market or selling it. Staging is the process of making a home look more attractive to potential buyers by arranging furniture, accessories and decor to create a warm and inviting atmosphere. Typically, staging is what happens following the homeowner’s cleaning, painting and completing small repairs to present the property in its best light. Here are some points to keep in mind regarding tax deductions for staging costs:
Staging costs can increase the sale price of a property which means a higher capital gain.
Staging costs cannot be deducted from rental income or property management expenses.
Staging costs must be classified as selling expenses on Schedule A of the seller’s tax return.
Staging costs must be reasonable and directly related to the sale of the property to be tax-deductible.
If the property is not sold and the staging is removed, the costs incurred become personal expenses and are not tax-deductible.
It’s important to keep accurate records of all the staging costs, receipts, and invoices to ensure they are included in the tax return when the property is sold. In conclusion, staging costs are tax-deductible if they are incurred in connection with the transaction of putting the property back on the market or selling it.