RC_LP_U_305.3 Supporting Income and Loss on Tax Returns

This course discusses using tax returns to determine qualifying income for self-employed borrowers when underwriting mortgage loans. The course examines Schedule C, Schedule D, and Schedule F of Form 1040 and how these types of income are adjusted using Fannie Mae Cash Flow Analysis (Form 1084) to determine qualifying income.

Supporting Income and Loss on Tax Returns begins with a discussion of the sole proprietorship business structure. It reviews Schedule C, Profit or Loss From Business, and it explains how underwriters adjust Schedule C income using Form 1084. Students then practice those concepts using a case study. The course continues with Schedule D, Capital Gains and Losses and explains how income and losses reported there are adjusted to arrive at qualifying income. The course concludes with an examination of Schedule F, Profit or Loss From Farming and a case study focused on that schedule.

This is a single-family/residential course.