Accountant · NH · Member since 2019 · 269 posts · 288 votes
2y
You also need to consider the paintings - to the point of @Michael Plaks, if you could have picked up a bunch of prints from Hobby Lobby to decorate the place - why did you do the $3,500 options? Perhaps it is a high end rental with tenants with certain expectations? Or did you just want these paintings and parking them in you rental for a couple years seemed like a good way to get a tax write off?
While there have been many taxpayer friendly rulings in this area, be aware that the IRS has challenged the deduction of artwork in the past. Tax Adviser has a great read on the topic, linked below, fairly technical, but gives you an idea that it may not be as black and white.
Most STRs report income and expenses on an IRS Schedule E (not Schedule C) unless your STR is offering "substantial services"-> for example, concierge services or a butler to guests.
For the painting, you can deduct it along with other furnishings and decorations that you've included in the STR to make it ready and available for tenants. Keep in mind that you need to consider whether or not furnishings and decorations need to be depreciated. .
.
.
*This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
I collect paintings. Paid ~3.5k of paintings last year. If I put them in my STR, can I write them off on my Schedule C?
For any business deduction, it needs to have a business purpose and be "ordinary and necessary." If you could decorate your STR with $350 worth of paintings, you would need to justify spending $3,500 on the same project if it does not have any economic benefit for your business.
Accountant · NH · Member since 2019 · 269 posts · 288 votes
2y
You also need to consider the paintings - to the point of @Michael Plaks, if you could have picked up a bunch of prints from Hobby Lobby to decorate the place - why did you do the $3,500 options? Perhaps it is a high end rental with tenants with certain expectations? Or did you just want these paintings and parking them in you rental for a couple years seemed like a good way to get a tax write off?
While there have been many taxpayer friendly rulings in this area, be aware that the IRS has challenged the deduction of artwork in the past. Tax Adviser has a great read on the topic, linked below, fairly technical, but gives you an idea that it may not be as black and white.