House sold and closed

[wincrasher]

I posted a while back that I decided to sell my old house as a fixer. It just wasn't worth the time and expense to fix it up myself to sell at a supposed market price.

Anyways, after much inconvenience and frustration, we finally closed last week. Bank of America got one more chance to screw me, and they did, for a few more hundred bucks, so kudos to those thieving bastards.

So now my question. I figure I lost $30k between what I had in the property and what I sold it for. That's just the purchase price, plus the out of pocket costs of improvements I made (kitchen & bath renos, new deck, AC system).

FWIW, I sold for $75k less than market value if the property were in decent shape.

Can I take an investment loss deduction on this?

[cschin4]

I think it is a good lesson. Everyone just assumes that real estate is a gold mine, that it will always go up and up. Owning property can be a liability and an expense. However, nobody ever wants to admit to losing money on anything so you rarely hear anyone talking about it. But, I think that we should talk about businesses that have failed, bad investments and so forth so we can all learn. I have found that people often will just lie or inflate/deflate the real numbers and costs to avoid really talking about how much was really lost or to make a gain sound better than it really was.
As for the OP, you took a chance and you have gained some valuable wisdom. You win some and you lose some. Obviously, do what you can to write it off but don't beat yourself up for taking a chance and making a mistake. Believe me, I have had my own share of those as well!

[LuxLiving]

For such a significant loss I think it would be well worth your dollars to get a good accountant/tax prep service to help with income tax prep this year.

I'm sure you could ask monkeymama here or on the blogs for some off the cuff wisdom on what questions you should be prepared to ask/provide documentation for.

I personally would get with someone early this month, just in case there is something else that needs to be done before year end to make maximum use of the loss.

[wincrasher]

Believe me, I'm certainly not beating myself up over this one.

I got a cheap place to live for 20 years.
I got a nice deduction each year on my mortgage interest. That deduction also put me over the standard deduction which allowed others to be used.
I had alot of fun and learned from all my "projects"
I had great neighbors and never feared break-ins or vandalism.

My area never had the run-up in values. In 20 years the value went from $75k to $152k according to the tax department. My problem was of my own creation - I let alot of things go because I lacked the time and money to address them. I did agonize over the decision to put more time and money in, or just let it go. In the end, I just let it go.

If I were to do things over again, I would have done some less costly upgrades- especially in the kitchen. I also would have tackled one project at a time instead of tearing up several things at once.

I did walk away with a nice check after the mortgage was paid. So my losses were over time, not at closing.

[LivingAlmostLarge]

Sounds familiar.

[irmanator]

I had alot of fun and learned from all my "projects"
I had great neighbors and never feared break-ins or vandalism.

I also would have tackled one project at a time instead of tearing up several things at once.

I picked these points out because those are me, lol.

[LMA]

I think it is a good lesson. Everyone just assumes that real estate is a gold mine, that it will always go up and up.

Everyone who is uneducated...

The worst way to invest is our of ignorance.