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Can the cost of storing furniture while a house is being prepared for sale be considered a selling expense?

Forum|Forum|3 years ago
February 24, 2023
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My wife and I sold our house last year. About two months before the sale, and on the recommendation of our real estate agent, we moved all of our furniture to storage so that the house could be re-carpeted and re-painted throughout the inside, and then staged with temporary furniture brought in by a staging company. Our furniture was in storage for two months or so. Can that storage cost be considered a selling cost? We were living in an apartment during this time and I understand that our temporary apartment rental would not be a selling cost. But without moving our furniture into storage, the house could not have been made as attractive to potential buyers, or so our real estate agent argued.

Not A Product Question

Best answer by Anonymous_

Is it likely that most sellers who remove their furniture for a staging return their furniture to the house after an open house or two? Our realtor arranged for staging that would last until prospective buyers submitted a successful bid. In our case, that was a matter of weeks. Following your view, homeowners who wanted staging probably would realize a gain in sale price, but that would be offset by having to pay movers to do twice as much loading and unloading of furniture. Our experience was that loading and unloading each took four people most of a day.

And for the record, our furniture was stored at a facility that was in the opposite direction from the location of the house that we eventually bought. The move from that storage location to our new home cost somewhat more than the move directly from our existing residence would have cost.

Frankly, and to be perfectly blunt, I find it absurd that the personal property (furnishings, et al) would have to be moved back into the house in order for the moving and storage costs to be considered a legitimate advertising/staging expense (in the form of marketing the house).

Making an unnecessary move would actually serve to increase the staging costs and would result in an even larger selling expense deduction (which would be the exact opposite of what the IRS would want).

O

Opus 17

Employee

No. The cost of staging is an allowable expense (advertising) as long as no permanent changes were made to the home. (If staging included painting or small repairs, those expenses are not allowable.) Moving out your old furniture might be allowable, but I'm on the fence. It sounds like a personal moving expense. But the cost of storing it because your new place wasn't ready, is definitely not allowable as an expense of advertising your home for sale.

J

jgeorges45Author

Ah, divided opinions.

I wouldn't count the cost of moving furniture into storage or the cost of moving it out once we bought another house. We are not eligible for a tax benefit from moving at all. But staging is a different question. Staging would not have been feasible at all if our (old) furniture had remained in the house. Isn't the whole idea of staging to replace what's there with more attractive - and perhaps less - furniture that shows off the house? For that matter, re-carpeting and interior re-painting would have been very difficult without removing at least some furniture.

O

Opus 17

Employee

My thinking is that moving the furniture into storage is a necessary part of the staging, but keeping the furniture in storage (because you had no where else to put it and your other house wasn't ready yet) is on you. Moving the furniture out of storage and into the new house would not be an expense of selling the old house.

However, if your new house was ready, would it be a selling expense to move your old furniture out if you moved it directly to the new house? That seems wrong, even if moving the furniture helped you clean and stage. Why would storage be an ordinary and necessary part of advertising? Whether you store the furniture, give it away, or sell it and buy new, is a personal decision, and not really an advertising expense.

The more I think about it, it seems to me that nothing about moving or storing your personal belongings is an advertising expense.

(Sometimes the answer is in black and white and 10 experts will give the same answer. This isn't one of those cases, I guess. I seem to recall a tax court case that discussed staging, and found that staging was an acceptable selling expense to apply to the cost basis calculation provided that no permanent changes were made to the home. Any permanent changes would be repairs or improvements. Improvements like new carpet also add to the cost basis, but repairs are not allowable. Everyone has the obligation to keep their property in good condition, and repairs made at the time of sale are no more allowable as basis adjustments than repairs made in the middle of your occupancy. However, I don't know of any tax court case that discusses whether the necessity to move old furniture out can be considered a selling expense rather than ordinary non-deductible moving expenses.)

V

Vanessa A

Yes, the storage costs for your items would be part of the staging costs since you had to remove your old stuff to bring in the staging items. This would be considered an advertising or selling expense.

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