Money Matters?

Question

My wife and I are in the process of purchasing a new home. After closing costs and down payments we will have $18,000 in the bank still left over from our nest egg.The only problem is the house needs close to $25,000 in work. What is the best way to go about this and not use or drain our nest egg, while getting the best tax breaks?

Answer 1

The tax breaks won't appear until you sell the house and can add the repairs to your base price, lowering the capital gains.  Depending on how severe the work is that is needed, you could spread the work out and pay for the work from current/future income and not touch the $18,000.  Alternatively, and depending on how much you put down, you could take out a loan on the equity and claim the interest as a deduction on your income tax.  This though has the downside of adding another debt and adding to your interest expense.

Answer 2

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