Zinnah, First, I re-read my previous post, it should read "Ended up using white latex caulk, removed from the tube, and we colored small portions of caulk with latex paint pigments." We went latex with latex, so all was well compatibility-wise. I never tried silicon caulk or siliconized-latex. I did small test batches of caulk tinted with latex paint pigments that the art teacher had, and with dry powdered pigment. I used to have a decent collection of powdered pigments from doing concrete countertops. I tried getting small 1-ounce squeeze bottles filled with liquid pigment from the paint department of the local hardware store, even offering to pay them, but they wouldn't do it. I thought that would mix great, the pigment would be quite concentrated, and the squeeze bottles would be an easy "drip count" metering device. The tubes of pigment from the art teacher and the dry pigments both worked well. I did try mixing some deep red/burgundy latex paint I had with caulk, but the results were not satisfying. In proportions to not ruin the caulk there was too little pigment so it came out pink. In proportions to get the deep color there was too much paint to it ruined the caulk.

We are doing the same (installing our own siding) and have chosen to go with a polyurethane caulk. We have been using Sika brand caulk -- both their 15LM and the 1a caulk. Not especially expensive (about $4/tube) and they come in a number of different colors. I have also read good things about Sonneborne (brand) and Tremco. Tremco is pretty hard to come by here, so we opted for Sika. Down side to urethane caulks is that you have to wait a full 7 days until it can be painted. We tested some pretty basic box store 'exterior grade' caulks compared to the Sika and found the Sika has a much better adhesion.... no comparison. If you're used to working with latex caulk, urethane caulk is a different ball of wax (read: messy), but IMO it's worth it. Good luck.

I have several questions. First, are the nails galvanized or stainless steel? If they are galvanized, I would prime them first with Ospho before caulking and then prime with a regular primer. Ospho is a green liquid that will turn rust black and prevent bleed through on your paint. Galvanized nails rust fairly quickly and this will head off a problem in a year or so down the road. You can also use Hammerite Rust Cap Primer for the nails. (Many painters tell me that QTips work great for applying Ospho). If they are stainless, I would caulk first and then prime the surface. This will prevent any flashing effect from the Ospho on the finish coat. I would actually prefer to use a spackling compound that will stay somewhat flexible, but you can use caulk also. Is the siding a hardi-panel or hardi-plank? I have not seen any real wood siding pre-primed in my market. If it is hardi-plank, I would prime the siding with a good latex 100% acrylic primer. You could use 123 by Zinsser, Suprime by Pratt and Lambert, or FreshStart by Ben Moore and then topcoat with your choice of paint. Every paint company will manufacture a 100% acrylic primer to use with their topcoat. The primer used on siding as well as steel doors is to protect the product in shipment. It is still intended to be primed before painting. I would highly recommend that your primer be manufactured by the same company as the paint for warranty reasons. Make sure you use a really high quality caulk. I have found that Big Stretch Caulk by Sashco is the easiest to work with of all the caulks on the market. It is paintable. It is a little expensive, but is very flexible and smooths out great. Consider having your primer tinted 1/4 to 1/2 formula of your topcoat color. It makes the paint cover better. The primer will still be a little light to the finish coat so you can see any areas you have missed when applying your topcoat. I do recommend two coats of finish paint.

You can ignore any advice you want. You have a change of plane there. It is industry wide specs that call for a silicone joint at all change of plane. Care not what the handyman used or is saying, its obvious you doubt their novice advice and its obvious by the quality of the work they are incompetant. Your big concern now is the proper way in which you remove all residue so Silicone can bond properly and so that you dont leave behind any MOLD prone residues under the new silicone install. So many clowns come here with mold under their poor attempt to correct a change of plane by improperly cleaning out latex based caulks and replace with the proper material. Then later claim their un-mold-abale silicone is producing mold. Its an age old mistake and ive told you exactly how to approach the repair. Now im not looking for likes here or thank you's . But if you speak to any one single tile professional that follows the TCNA/ansi youll see what im saying. The way forward is in your hands. Acetone . Use it. and since you are spanning a larger than industry standard 1/8" joint you need to choose your flash point and type silicone properly theres no less than hundreds of 100% silicone blends/types out there.