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As my loyal readers know, I have had a construction defect law suit against the builder of my home. Last August I reached a settlement and in December I received the cash...to fix my home. I have signed a contract to make repairs to the home which would alleviate the cause of the probelm (the house is built on expansive soil). The fix is to build a cutoff wall or better said a 5 foot deep FOOTING around the perimeter of the home, provide drainage from the back to front, install rain gutters and regrade the lot to provide better fall off from the house... After this iall this work is done I will have a sizable chunk of change left in my pocket to assuge the pain of having to go through such an ardous ordeal ....

Now here is the kicker..My Accountant has informed me that the remainder of the money is TAXABLE. No great shock here folks....I have my choich though....If after the home is fixed and I sell it THIS YEAR...the remaindr will be taxed at the capital gains rate of 15%...if I don't sell the home this year...I will have to pay 25% at the ordinary income tax rate... This is all besides the 250K exclusion I get for living in a home for 2 years...I have maxed out my gain allready.. even after paying out closing costs.

Also thrown in the mix is that in a RISING interest rate envirnoment ....I can be assured that interest rates will be higher next year....thus making a home mortgage more expensive...

However the cash difference between 15% and 25% tax rate can mostly be eaten up with the cost of moving and various closing cost expenses...however those costs will be incured whenever I decide to move...

One other factor to gauge and I don't have a firm opinion yet...My neighborhood has numerous homes that are experincing expansive soil difficulties...I would say at least 50 houses out of the 172...none of them have been repaired to TRULY ALLEVIATE the problem the Builder continues to apply band aid fixes as his solution and people patch and sell without disclosing...There were 10 homes that were bought back under a Class Action Lawsuit by the Builder fixed and resold...2 of them I know for certain are reexperiencing problems...There is also the growing possibilty that another larger Class Action lawsuit is in the making...The problem for me is the smell from these continuing problems and this possible law suit MIGHT effect property values in my hood...on the other hand LV has a real short memory.

Now I suppose it comes down to my personal feelings...this house and neighborhood has left a bad taste in my mouth.. however I am finally able to just kick back and buffet down...

So do I stay or do I go....