Rant first
Two years ago, we decided to buy a house. The area we lived in, where dh works, was not affordable. We found a town 30 minutes south that had affordable housing. We bought a house there. The mortgage was $236 more per month than we had bene paying in rent. It was a stretch, but homeownership is always worth it, right? So, we shopped around for a loan, and found one. We put $4000 down. So, for the first year, we paid $6832 more than we would have if we kept renting. So, we moved in on APril 1, 2005. Then, over the summer, gas prices went up to $3 a gallon. So, dh's gas cost went to about $200-$300 a month. We both started to go to school, so that we could get into different careers that would be more lucrative. Also, financial aid gave us some extra money to live on. We were struggling but bobbing along.
Then came problems with the neighbor. His barking dog issues escalated and his attitude escalated to the point where we were calling the police because I feared physical violence from him. So, after 1 year, we put the house on the market. My husband ended up in the hospital due to stress. We decided it wasn't worth it. We got out just before the market began to tank. We had the house up for 2 months. We were both in school fulltime, homeschooling hte kids, dh working fulltime with an hour commute. He dropped out of his classes in thelast quarter because we had seen that his health couldnt take the stress. So, his chancess of a more lucrative career got back burnered as well.
We sold the house and made $14000 profit. Of course, as I said, we had paid nearly $7000 into the house in the first year, so $7000 is more like what we walked with. When we moved out of the rental we had been living in, they had to replace the carpets due to pet stains, and they charged us $2100. We are making payments on it. When we were getting ready to move into a new rental, after selling the house, we were assured we would get a good referral, since we are paying off that debt. Well, they didn't give us a good referral, and so we had to pay a triple deposit up front to move itno our new place. So, moving cost us $4000. Plus, I had charged up $2000 on my credit card to get nice things to make the house pretty and saleable. So, in the end, that profit was nothing monumental. I am glad we didn't lose our shirts, but it wasn;t this wonderful investment either.
So, now it is a year later, and tax time. We have to pay capital gains tax on the money. That we had been prepared for. It is going to be about $900. But, as dh was filling out the boxed, WHAM! we found out that we don't qualify for EIC because of our "investment" income. I just want to cry. This house just keeps biting us in the ass.
So, my advice question is this: is there anyway to offset the investment price? Will itemizing help us?
Two years ago, we decided to buy a house. The area we lived in, where dh works, was not affordable. We found a town 30 minutes south that had affordable housing. We bought a house there. The mortgage was $236 more per month than we had bene paying in rent. It was a stretch, but homeownership is always worth it, right? So, we shopped around for a loan, and found one. We put $4000 down. So, for the first year, we paid $6832 more than we would have if we kept renting. So, we moved in on APril 1, 2005. Then, over the summer, gas prices went up to $3 a gallon. So, dh's gas cost went to about $200-$300 a month. We both started to go to school, so that we could get into different careers that would be more lucrative. Also, financial aid gave us some extra money to live on. We were struggling but bobbing along.
Then came problems with the neighbor. His barking dog issues escalated and his attitude escalated to the point where we were calling the police because I feared physical violence from him. So, after 1 year, we put the house on the market. My husband ended up in the hospital due to stress. We decided it wasn't worth it. We got out just before the market began to tank. We had the house up for 2 months. We were both in school fulltime, homeschooling hte kids, dh working fulltime with an hour commute. He dropped out of his classes in thelast quarter because we had seen that his health couldnt take the stress. So, his chancess of a more lucrative career got back burnered as well.
We sold the house and made $14000 profit. Of course, as I said, we had paid nearly $7000 into the house in the first year, so $7000 is more like what we walked with. When we moved out of the rental we had been living in, they had to replace the carpets due to pet stains, and they charged us $2100. We are making payments on it. When we were getting ready to move into a new rental, after selling the house, we were assured we would get a good referral, since we are paying off that debt. Well, they didn't give us a good referral, and so we had to pay a triple deposit up front to move itno our new place. So, moving cost us $4000. Plus, I had charged up $2000 on my credit card to get nice things to make the house pretty and saleable. So, in the end, that profit was nothing monumental. I am glad we didn't lose our shirts, but it wasn;t this wonderful investment either.
So, now it is a year later, and tax time. We have to pay capital gains tax on the money. That we had been prepared for. It is going to be about $900. But, as dh was filling out the boxed, WHAM! we found out that we don't qualify for EIC because of our "investment" income. I just want to cry. This house just keeps biting us in the ass.
So, my advice question is this: is there anyway to offset the investment price? Will itemizing help us?
