re: To deduct or not to deduct, that is the question.

quote:

---

If you are a mortgage originator, you are sort of proving his point

---

I'm not a mortgage originator.

To me, this is an example of fraud:

This will be a simplified version. Taxpayer has no income other than Schedule C business income. The mortgage company requires income of $100,000 to qualify for the loan.

Here is the taxpayer's actual Schedule C:
Gross Income = $500,000
Cost of Goods Sold = <$300,000>
Supplies = <$50,000>
Repairs = <$50,000>
Vehicle Expenses = <$15,000>
Office Supplies = <$10,000>
Net Income = $75,000

The taxpayer would not qualify for the loan.

But, wait, let's just not deduct the vehicle/office supplies. That will get us to $100,000!!!

To me, that is fraud. Taxpayer is artificially inflating their income.