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Is the cost of staging an NYC apartment for sale tax-deductible?

If you sold your New York City apartment in 2017, you'll want to figure out which expenses you can write off.

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Question:

I sold my co-op in December. Are expenses related to staging a co-op apartment for sale tax-deductible? Are there any other selling-related expenses I can write off?

Answer:

Some of the expenses associated with readying your apartment for sale are tax-deductible, according to our experts.

"Staging the apartment is deductible, similar to other fees directly related to selling an apartment," says certified public accountant Jonathan Medows of Medows CPA. "It is the equivalent to advertising."

The IRS considers the costs of advertising your apartment to be tax-deductible, and hiring someone to stage it for you—or doing so yourselfcan be written off on your taxes, as long as you actually go through with the sale. If you stage the home and then do not sell it, staging expenses cannot be deducted.

"You can also deduct expenses like painting and fixing up the apartment to get it ready for sale, as well as closing costs associated with the sale," says Koreen Jervis, an accountant with Korjé Tax Professionals.

This is good news for New York City sellers, who may face capital gains taxes on the profit from the sale of their apartments. However, you may be able to deduct some of your profit, depending on your circumstances.

Pro Tip:

Thinking of selling?  To find out what actual buyers are willing to pay for your co-op, condo or brownstone, consider discreetly "pre-marketing" it.  New York City real estate brokerage Triplemint has an entire data-driven pre-marketing platform that provides a way to quietly test your asking price and your marketing strategy  among real-life qualified buyers before publicly listing your home. There's no charge to participate and no obligation to enter a traditional listing agreement at the end of the pre-marketing period if your place hasn't sold. Click here for more information.

"If it was the sellers’ primary residence for at least two of the past five years, a single person can deduct another $250,000 [from their profit] and a married couple $500,000," says Deanna Kory, a broker with Corcoran.

Those taxes can be further offset if you made substantial improvements to your apartment that added to its value or prolonged its life, such as the installation of central air, new flooring, or new appliances. The IRS offers a list of qualifying renovations.

Keep in mind that as a co-op owner you can also deduct your share of the cost of building-wide updates as well. Ask management for records of these improvements. And consider consulting a tax attorney to make sure you're not missing anything.


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