How to Read Tax Returns and
Close More Loans
Presented by David Kuiper
MBA, CMA, CMPS
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About David Kuiper
David started in mortgage banking in 1990. He graduated from
Hope College in 1988 with degrees in Pre-Med Physiology and
Business Administration. He also holds an MBA in finance from Grand
Valley State University and is a Certified Mortgage Planning Specialist
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Rated as one of the top mortgage loan officers in the
country
Closed over 5500 loans totaling in excess of $900,000,000
Nationally recognized author, speaker and trainer
Teaching faculty of Loan Toolbox and Mortgage Planner
University.
Expert on First Impressions and Building Client Intimacy.
David, his wife Michelle, five children, two cats and a dog
live in Holland MI and Fort Myers FL.
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Today’s Seminar Will:

Give you an overview of how to read tax
returns & understand why

Learn how to find “hidden” cash flow in
tax returns & write more loans

Narrative and forms for downloading
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When are tax returns needed?
1.
A borrower is considered self-employed when they own
25% or more interest in a business. This is when the
taxes would be required to calculate the borrower’s
income.
2.
When 25% or more of the income is from other than base
salary. Examples of this are if the borrower’s income
comes 25% or more from overtime, bonuses,
commissions or piecework.
3.
Tax Returns are necessary if the borrower works for a
family-owned business.
4.
If the borrower has rental income, analyzing the tax return
will determine if there is net income or loss from the rental
income.
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Different types of self employed
borrowers:
Sole Proprietorship – A business owned by one person. The individual
owner is personally liable for all debts of the business and therefore has
unlimited liability. Income or loss is reported on Schedule C, Form 1040, the
individual tax return.
Partnership – When two or more individuals form a business. The partners
share profits and categories, General Partnership and Limited Partnerships.
General Partnership – Each partner is personally liable for the debts of the
whole business; however, business creditors are required to attach business
assets first. Personal creditors cannot access partnership assets.
S Corporation – Generally, a small, start-up business that is taxed in the same
manner as a partnership.
Corporation – A state-chartered business owned by stockholders, wherein the
stockholder is not personally responsible for the debts of the corporation. The
profits (retained earnings) are put back into the business, or are distributed to
stockholders as dividends. Corporations report their income and losses on the
U.S. Corporation Income Tax Return, Form 1120.
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Cash Flow Analysis Worksheet
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Form 1040
Personal Individual
Tax Return
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Form 1040
(Page 2)
Personal Individual
Tax Return
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Schedule A
Itemized
Deductions
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Schedule A
(Page 2)
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Schedule B
Interest &
Ordinary Dividends
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Form 2106
Employee Business
Expenses
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(Page 2)
Form 2106
Employee Business
Expenses
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Schedule C
Profit or Loss
from Business
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Schedule C
(Page 2)
Profit or Loss
from Business
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Form 4562
Depreciation &
Amortization
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Form 4562
(Page 2)
Depreciation &
Ammortization
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Schedule D
Capital Gains
& Losses
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Schedule D
(Page 2)
Capital Gains
& Losses
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Form 6252
Installment
Sale Income
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Instructions for
Form 6252
Installment
Sale Income
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Instructions for
Form 6252
Installment
Sale Income
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Instructions for
Form 6252
Installment
Sale Income
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Form 4797
Sales of
Business Property
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Form 4797
(Page 2)
Sales of
Business Property
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Schedule E
Supplemental
Income & Loss
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Schedule E
(Page 2)
Supplemental
Income & Loss
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Form 8582
Passive Activity
Loss Limitations
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Form 8582
(Instructions)
Passive Activity
Loss Limitations
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Form 8582
(Instructions)
Passive Activity
Loss Limitations
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Schedule F
Profit or Loss
from Farming
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Schedule F
(Page 2)
Profit or Loss
from Farming
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Form 1065
Return of
Partnership Income
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Form 1065
(Page 2)
Return of
Partnership Income
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Form 1065
(Page 3)
Return of
Partnership Income
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Form 1065
(Page 4)
Return of
Partnership Income
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Form 1065
(Page 5)
Return of
Partnership Income
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Scheule K-1 of
Form 1065
Partner’s Share of
Income,
Deductions,
Credits, etc.
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Scheule K-1 of
Form 1065
(Page 2)
Partner’s Share of
Income,
Deductions,
Credits, etc.
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Form 1120S
Income Tax Return
for an S Corporation
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Form 1120S
(Page 2)
Income Tax Return
for an S Corporation
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Form 1120S
(Page 3)
Income Tax Return
for an S Corporation
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Form 1120S
(Page 4)
Income Tax Return
for an S Corporation
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Schedule K-1 of
Form 1120S
Shareholder’s
Share of Income,
Deductions, Credits,
etc.
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Form 1120
U.S. Corporation
Income Tax Returns
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Form 1120
(Page 2)
U.S. Corporation
Income Tax Returns
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Form 1120
(Page 3)
U.S. Corporation
Income Tax Returns
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Form 1120
(Page 4)
U.S. Corporation
Income Tax Returns
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Form 1120
(Page 5)
U.S. Corporation
Income Tax Returns
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Now you know…
Depreciation
 Depletion
 Amortization
 Business Use in Home
 Depreciation from mileage

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Cash Flow Analysis
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Cash Flow Analysis
(Page 2)
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Cash Flow Analysis
(Narrative)
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Cash Flow Analysis
(Narrative)
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Cash Flow Analysis
(Narrative)
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Downloads available with this
course
…(downloads available on the original page where you accessed
this class)

Cash Flow Analysis
Worksheet

Narrative of Cash
Flow Analysis

Copies of Tax
Returns, Schedules,
with comments
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Test Yourself…

Find old file/self-employed

Cash Flow Analysis Worksheet

Work thru Tax Returns

Did you get the same income as the
Underwriter?
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Sample Script…
“I’m an expert in analyzing tax returns. Before
we make the judgment that you don’t have
enough income, or that business was not so
great, let me take a look at your tax returns. We
can then make the best recommendations for
you.”
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Tips…

Ask for “complete” tax returns

Go directly to CPA or Financial Planner

Email to you

Stop by and introduce yourself
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Become a
“Self-Employed” Expert
Higher loan balances
 Working relations with processor/UW
 Connect with CPA/Financial Planner
 Find more income
 Save deals for your real estate agents
 More referrals

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Tax Return Extensions

Last 2 year’s tax returns

Current profit & loss statements

FHA – Also most recent quarterly
statement
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In Closing (no pun intended)

Highlight income you can use

Transfer to Cash Flow Analysis Form

Leave Taxes with you to review
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How to Read Tax Returns Class
Brought to you by:
www.MortgageCurrentcy.com
Questions?
David Kuiper
Certified Mortgage Planning Specialist
616.546.9250 Direct
[email protected]
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