RESOURCES
Lender Risk & Interpretation
Interpreting a tax return goes beyond reading the numbers – it requires understanding what those numbers mean for lending decisions. These articles focus on identifying risks, evaluating income reliability, and uncovering details that can significantly impact borrower analysis.
Featured Articles
Why AGI is Not a Reliable Indicator of Borrower Cash Flow
Adjusted Gross Income (AGI) is often used as a starting point for analysis but can be misleading when evaluating borrower cash flow. This article explains why AGI falls short and what lenders should focus on instead.
Capital Gains and Losses: Recurring or Nonrecurring?
Capital Gains and losses can vary significantly from year to year and may not represent stable cash flow. This article explains how to determine whether these amounts should be considered recurring for borrower analysis.
Schedule E Passive Losses: Common Pitfalls for Lenders
Passive losses can significantly distort taxable income and lead to incorrect conclusions about borrower performance. This article explains common pitfalls and how lenders should evaluate these losses.
More Resources
Cash Flow Analysis
Articles focused on evaluating borrower cash flow, recurring and non-recurring income sources, and adjustments that impact lending decisions.
Tax Return Analysis
Articles focused on interpreting tax return forms, business returns, K-1s and borrower cash flow documentation.