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re: To deduct or not to deduct, that is the question.
Posted on 12/15/15 at 11:33 am to krehn11
Posted on 12/15/15 at 11:33 am to krehn11
quote:
My plan is to, like I said, claim every penny of income, even the cash purchases and private party sales as business income. Then take no deductions what so ever and then get out the Vaseline and prepare myself for the raping.
0
Posted on 12/15/15 at 11:35 am to TheOcean
A mortgage company is going to lend to a self employed borrower off of AGI and there may be additional deductions they subtract from that. It is a tough situation when it comes to getting a mortgage depending on the amount of business deductions taken.
The mortgage company will require the borrower to sign a form that allows them to pull tax returns. This is to protect them from a borrower that fraudulently produces tax returns to inflate income. If red flags are raised they'll pull the returns as verification.
The mortgage company will require the borrower to sign a form that allows them to pull tax returns. This is to protect them from a borrower that fraudulently produces tax returns to inflate income. If red flags are raised they'll pull the returns as verification.
Posted on 12/15/15 at 11:36 am to VABuckeye
Can you explain why he would be fraudulently inflating his income? It seems like he would just be representing his income without taking some discretionary deductions.
This post was edited on 12/15/15 at 11:38 am
Posted on 12/15/15 at 11:36 am to VABuckeye
quote:
VABuckeye
Thank you.
Posted on 12/15/15 at 11:37 am to TheOcean
quote:
TheOcean
VABuckeye said what I've been saying the whole time?
Posted on 12/15/15 at 11:45 am to TheOcean
quote:
Can you explain why he would be fraudulently inflating his income? It seems like he would just be representing his income without taking some discretionary deductions.
The money has been spent. He is making it appear he has more money available to service the loan than he actually has.
Posted on 12/15/15 at 11:47 am to TheOcean
quote:
Can you explain why he would be fraudulently inflating his income? It seems like he would just be representing his income without taking some discretionary deductions.
Perhaps I wasn't clear in the language I used.
Here's the scenario I presented. Borrower files income tax returns with the IRS with a ton of business deductions and a low AGI. Borrower then goes to a mortgage company with a fraudulent tax return for the same year with the deductions removed. Something smells fishy to the mortgage company and they exercise their right to pull actual returns. Borrower is caught with his pants down and is denied the mortgage.
Hope that clears it up.
Posted on 12/15/15 at 11:49 am to VABuckeye
quote:
Borrower files income tax returns with the IRS with a ton of business deductions and a low AGI. Borrower then goes to a mortgage company with a fraudulent tax return for the same year with the deductions removed.
Right. That is clearly fraudulent. But that is different than what the OP is asking about.
Posted on 12/15/15 at 11:53 am to TheOcean
quote:
But that is different than what the OP is asking about.
What the OP is asking about is still fraudulent.
See what was said above - the money has been spent; he does not have the money to service the loan. He is trying to make it look like he has more money than he actually has.
Posted on 12/15/15 at 11:54 am to TheOcean
I hit reply to your post but I was replying to a premise that another poster made. I see nothing wrong with the OP. If he doesn't want to claim the deductions to bump up his AGI and pays taxes on the money that is his business.
Now, amending the tax return later would not be a good play by the OP. He needs to live by what he filed and reported to the IRS and the lender.
Now, amending the tax return later would not be a good play by the OP. He needs to live by what he filed and reported to the IRS and the lender.
This post was edited on 12/15/15 at 11:57 am
Posted on 12/15/15 at 11:56 am to VABuckeye
quote:
I see nothing wrong with the OP. If he doesn't want to claim the deductions to bump up his AGI and pays taxes on the money that is his business.
I agree.
Posted on 12/15/15 at 11:58 am to krehn11
I never said I wasn't going to claim expenses, 
I would go bankrupt real quick if I didn't claim expenses.
I would go bankrupt real quick if I didn't claim expenses. Posted on 12/15/15 at 11:59 am to Napoleon
So what is your original post about?
It seems that's exactly what you are saying you are going to do.
quote:
Then take no deductions what so ever and then get out the Vaseline and prepare myself for the raping.
It seems that's exactly what you are saying you are going to do.
This post was edited on 12/15/15 at 12:00 pm
Posted on 12/15/15 at 12:03 pm to TheOcean
there's no fraud, the tax returns I would give them would be the same ones I send the IRS.
I'm talking about not deducting vehicle expenses, not deducting the $1200 I spent on the convention this year, not deducting my charitable donations, not deducting the cell phone bill, not deducting credit card processing fees and that kind of stuff. The things some people even forget to deduct. I'm going to claim expenses, I'm in a service repair field and a lot of expenses are parts. I have to claim that.
It's just in the past I did all the forms myself believing I knew enough to do it all right, last year I used Turbotax and it got me a lot more in deductions.
which in turn made my net income decline.
I'm talking about not deducting vehicle expenses, not deducting the $1200 I spent on the convention this year, not deducting my charitable donations, not deducting the cell phone bill, not deducting credit card processing fees and that kind of stuff. The things some people even forget to deduct. I'm going to claim expenses, I'm in a service repair field and a lot of expenses are parts. I have to claim that.
It's just in the past I did all the forms myself believing I knew enough to do it all right, last year I used Turbotax and it got me a lot more in deductions.
which in turn made my net income decline.
Posted on 12/15/15 at 12:04 pm to LSUFanHouston
quote:
The money has been spent. He is making it appear he has more money available to service the loan than he actually has.
This post was edited on 12/15/15 at 12:11 pm
Posted on 12/15/15 at 12:05 pm to VABuckeye
quote:
erhaps I wasn't clear in the language I used.
Here's the scenario I presented. Borrower files income tax returns with the IRS with a ton of business deductions and a low AGI. Borrower then goes to a mortgage company with a fraudulent tax return for the same year with the deductions removed. Something smells fishy to the mortgage company and they exercise their right to pull actual returns. Borrower is caught with his pants down and is denied the mortgage.
Hope that clears it up.
Jesus, I hope it did not sound like I intended to do that.
All I'm asking is should I just not claim simple deductions like use of vehicle, cell phone and that.
Posted on 12/15/15 at 12:07 pm to Napoleon
quote:
All I'm asking is should I just not claim simple deductions like use of vehicle, cell phone and that.
Are use of a vehicle and cell phone legitimate business expenses?
Posted on 12/15/15 at 12:09 pm to krehn11
quote:
It seems that's exactly what you are saying you are going to do.
why are you even here? Half the posts in the thread are by you. Loss and expenses will be claimed, I meant deductions, I'm sorry if I am not as adept as you in the lingo terms of it, but I would be stupid as all shite to not claim the nearly $40,000 spent in buying parts last year as expenses. Jeez.
I'm simply talking about itemized deductions like job related expenses that are in the gray area. Things like my truck and phone that I use for both. The convention in Miami that was also a vacation, but also a convention. That stuff.
I'm not at all looking to break any laws what so ever.
So please your "help" has been noted now please go "help" some one else.
Posted on 12/15/15 at 12:10 pm to yellowfin
yes truck is 75% used business and phone is 80-90% business.
Posted on 12/15/15 at 12:11 pm to Napoleon
There has to be a way for you to find a more savvy lender that deals with small business owners. Seems foolish to not look at deductions when looking at someone's net income.
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