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USDA Loan - Business Loss reported on prior Tax Return. Help!
Posted on 4/6/16 at 11:37 pm
Posted on 4/6/16 at 11:37 pm
I really need some help here. I'm in the mortgage process and scheduled to close on a home at the end of this month; however, I have one issue. I have a salaried W-2 job that qualifies me for the mortgage; however, I had a small lawn business (on the side) that I started and dissolved last year where I reported a loss of $6k on 2015 Tax Return due to start-up costs. Do anyone have any knowledge of USDA not calculating this one time loss in my income? I did read a section of the USDA handbook that states the following:
Should I be worried at this point? My broker is now aware of this and will follow-up with the underwriter sometime tomorrow. As I dissolved the business, I didn't think to say anything about this on the front end until the underwriter pulled my tax transcripts. I totally forgot about it. Will they include the loss against my income? I know this is a bad situation, I don't need any scorns or chastisements right now. I can't sleep or rest right now.
quote:
The net income from the operation of a farm, business, or profession. The
following provisions apply:
• Expenditures for business or farm expansion, capital improvements, or
payments of principal on capital indebtedness shall not be used as deductions
in determining income. A deduction is allowed in the manner prescribed by
Internal Revenue Service (IRS) regulations only for interest paid in
amortizing capital indebtedness.
• Farm and non-farm business losses are considered "0" in determining annual
income. A negative amount must not be used to offset other family income.
Should I be worried at this point? My broker is now aware of this and will follow-up with the underwriter sometime tomorrow. As I dissolved the business, I didn't think to say anything about this on the front end until the underwriter pulled my tax transcripts. I totally forgot about it. Will they include the loss against my income? I know this is a bad situation, I don't need any scorns or chastisements right now. I can't sleep or rest right now.
This post was edited on 4/7/16 at 12:01 am
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