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Let’s dive into how we look at the financials of a corporation when someone who owns their own business is trying to get a mortgage. Business owners who run a corporation report their taxes using IRS Form 1120. For more on what a corporation is, check another section called “Business…
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S corporations and some LLCs (Limited Liability Companies) have a special way of dealing with profits and losses. Instead of the company itself paying taxes on profits or deducting losses, these figures are passed on to the owners or shareholders. These shareholders then report this income or loss on their…
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When a person has an ownership stake in a partnership or a certain type of company called a Limited Liability Company (LLC), they must report their share of the business’s income or losses on their personal tax returns. This is done using specific tax forms provided by the IRS: Form…
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This section explains how income or loss from a business is reported for someone who owns a part of a partnership, S corporation, or LLC. When you own part of such a business, your share of the income or loss it makes is shown on a tax form called Schedule…
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This guideline focuses on how income or loss from farming activities, as reported on IRS Form 1040, Schedule F, is considered in the mortgage process for someone who is self-employed. When someone earns money from farming, they report this income on a specific tax form known as IRS Form 1040…
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Income can come from different sources, like renting out property, royalties from creative works, or profits from being part of a business partnership. The IRS Form 1040, Schedule E, is a document where you report this kind of income or loss when filing taxes. This form helps to move this…
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This section provides information about how income or loss from selling investments or property (reported on a tax form called IRS Form 1040, Schedule D) affects someone’s ability to qualify for a mortgage. The IRS Form 1040, Schedule D, is a tax form used to report profits or losses from…
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When a person runs their own business by themselves, it’s called a sole proprietorship. The money this business makes or loses is figured out using a form from the IRS called Schedule C. This form is part of their personal tax return on IRS Form 1040. If a lender is…
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When a person applies for a mortgage, the lender needs to figure out how much money the applicant really makes. This can get tricky because not all the money a person says they earn on their tax forms is guaranteed to keep coming in the future. To sort this out…
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When a lender looks at the tax returns of someone who works for themselves, they’re not just looking at how much money the person made. They’re looking deep into where this money comes from and how regularly it comes in. It’s important for the lender to see that the money…