RC_LP_U_305.4 Supplemental Income and Loss on Tax Returns

This course explains how to analyze income reported on Schedule E (Form 1040) and Schedule K-1 (Form 1065) for mortgage lending underwriting. It discusses how income reported on these tax returns is adjusted using Fannie Mae's Cash Flow Analysis (Form 1084) and rental income worksheets (Fannie Mae Forms 1037, 1038, 1038A, and/or 1039).

Supplemental Income and Loss on Tax Returns begins by introducing Schedule E (Form 1040), Supplemental Income and Loss, which is used to report income and loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc. It then describes how income from royalties reported on this form is analyzed using Form 1084, and explains how rental income reported on Schedule E is calculated using Form 1038. Students are give an opportunity to practice calculating rental income in a brief case study. Schedule E in a brief case study. The course then introduces Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., discusses how it is used in connection with Schedule E to report partnership income, and explains how Form 1084 is used to calculate this income. The course concludes with a brief case study that involves calculating partnership income.

This is a single-family/residential course.