So I jumped on the band wagon and bought a fixer upper..........

[Angelique F.]

I was told all these wonderful things about how I would get my money back for the work I put into the home.  Ahhahhaha, no, that's not the way it works.  You got repairs and you got improvements and only the REPAIRS can be deducted in the year you spent the money for the work and trust me, NOTHING IS CONSIDERED A REPAIR IN THE EYES OF THE IRS.  ITS ALL CONSIDERED AN IMPROVEMENT.  Guess how long it takes to get credit for an improvement?  Bout 150 friggen years.  I am so frustrated with this entire process.  I must have spent 40 THOUSAND DOLLARS fixing up this dump.  Thank God my plan was to rent it out which I did for 3 years and yesterday I sold it.  But guess what, now I gotta pay capitol gains in excess of 8 thousand dollars because it was a rental property.  Trust and believe you better know what you are doing listening to all these people talking about how wonderful this sh** is, cuz it can certainly mess you up if you dont.  

[Shavar G.]

@Angelique F.

Two things are painfully obvious after reading your post:

1. You didn’t have a clear exit strategy in mind before you made this purchase

2. You could have used a little more research time to better understand all of the implications of what you were getting yourself into.  

It’s not clear to me from reading your post what your objective was when you made this purchase as you rented it for three years, but are not happy with the tax benefits or lack thereof.  And you’re not happy with the capital gains taxes after selling.

The saying goes “you make your money when you buy a property” and it sounds like you dove in head first without a solid understanding of that point only to experience an outcome that was not what you expected.

The great news is that the experience you gained here has the potential to be invaluable, and totally reshape your approach to investing.  There are a lot of people making a lot of money from real estate and the difference between you and them is the time they’ve invested into learning and perfecting their processes.  Only you know how much time you spent doing the above, but if you aren’t getting the results you desire, the answer isn’t to do (whatever you intended to do above NO DISRESPECT), but to learn from your mistakes and avoid making the same ones next time.  Good luck on your journey, and don’t let this one setback deter you. 

 “The champ will always be the champ so long as (s)he continues to get up!”