Looks like a great space. I think I would orient the sofa toward the fireplace but kind of depends on your furniture and whether you will have a TV in this room.

first of all, loving the big window, however NOT liking the wall and the floor ... (judging on what I know will still be there once the current owner takes his furniture) I would suggest to taint the floor in a tone that fits with the wall, regardless what color you'll have on the wall! Its an orangy floor which doesnt fit with every color unfortunately ...

Agree with "decoenthusiaste", we need to see furniture YOU are bringing and answer the question will there be a TV in the room and will it be on the wall or on/in a cabinet.

This is almost identical to my formal living area and I have pulled the sofa away from the wall and faced it to the fireplace with a sofa table behind it and left enough area that it transistions to the entry. The corner behind the sofa has a secretary table and I have placed chairs to each side of the fireplace. It is stunning and gives you more options than two walls to place the sofa.

In terms of furniture layout there are lots of possibilities - do you have similar furniture to this person's?

You will note that they have one big sofa and then just some padded chairs... this is what keeps the room light.

The challenge with this room is that it has a window with a great view on one side and a fireplace in another and the where to make the focal point of the room. In this instance, the view is not seen by anyone on the sofa. So whatever seating you use, you could benefit by having it on or near the opposite wall, or, as eshirley said facing the fireplace. I suggest you bring your furniture in, and move it around in various layouts till you feel you are satisfied. If you are still frustrated, then post a picture.

Thanks guys! We don't have our furniture yet - was waiting to get some suggestions before purchasing. I do like the idea of the sofa facing the fireplace. Found a few good examples of this on houzz in my Living Room Idea gallery!