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Qualifying Borrowers Using Personal Tax Returns Part 2: Schedules D, E & F

Feb 15 10:00 AM - Feb 15, 2023 11:00 AM
Feb 15, 2023 10:00 AM - 11:00 AM
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Part 2 of this information-intensive series will continue the journey to convert 1040 personal tax returns into cash flow and will focus on Schedules D, E, and F. Learn more about making solid lending decisions by understanding how to get cash flow from personal tax returns.

Learning Objectives

  • Identify the real cash flow from Schedule D: Capital Gains and Losses and determine whether it is recurring income or a one-time event
  • See the real cash flow from a rental property or source of royalty income (Schedule E, Page 1) – it’s more than just adding back depreciation
  • Weed out “phantom” pass-through incomes and find the real cash flow from partnerships and S corporations (Schedule E, Page 2)
  • Determine if that farm is earning a cash profit or not (Schedule F)

Tax returns don’t show cash flow; they show taxable income. What you need to know is cash flow because that is how your loan is paid back. With the process outlined in this session and the free Lenders Tax Analyzer© software each registrant receives, you will gain an easy, reliable method to convert a borrower’s personal tax return (Form 1040) into a borrower’s cash flow statement.

In Part 2 of this two-part series, you will learn to cash flow Schedule D: Capital Gains and Losses; Schedule E, Page 1 (Rental and Royalty Income); Schedule E, Page 2 (Partnerships and S Corporations), and Schedule F (Farm Income). When you finish this session, you will be able do a little “magic” and convert taxable incomes into cash flows, which you can then plug into your credit scoring model, debt-to-income ratio, or disposable income calculation.

Note: This session is designed for consumer and commercial lenders. This method does not follow Fannie, Freddie, or QM rules used in mortgage lending.



Timothy P. Harrington, TEAM Resources 

Tim Harrington is Founder and CEO of TEAM Resources and has been a financial institution consultant for over 29 years. Tim has advised lenders on verifying income from tax returns since 1992, and consults with financial institutions nationwide on issues of strategy, profitability, and board governance. He speaks at nationwide conferences and has presented in Canada, Mexico, Puerto Rico, Jamaica, and the Virgin Islands. Tim is the author of the popular software, Lenders Tax Analyzer. In addition, his book “Eisenhower on Enlightened Leadership” has been used by management teams nationwide to improve leadership skills. He did his undergraduate studies at Gonzaga University and graduate studies at the University of Washington.




Your registration includes unlimited locations, making it easier to share and learn with remote staff.

Please note: You may share the link with others at your credit union, however the confirmation will be sent to one primary contact at your credit union. It will be up to the primary contact to share the material with others.

Additional Info

Event Type

On-Demand Webinar

Topics Covered

  • On-Demand Webinars
  • Lending & Collections
  • Compliance