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PI or PITI Confusion…

Mandi’s question: I recently purchased your Essentials 1040 Review and Beyond the Basics Manual. I have a question regarding the taxes and insurance shown on line 16 of the Schedule E My...
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Is your borrower’s business a hobby?

You may wonder why you should care if an individual, either your borrower or the guarantor of the business borrower, is playing a little fast and loose with the ‘hobby’ rules. I...
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What Credit Analysts need to know about CAMELS

I just read a great article entitled “The CAMELS Rating: How to Get Over the Hump” by Roger Shumway, executive vice president and chief credit officer at the Bank of Utah. As a reader...
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Non-obligated entities. Is the K-1 enough?

Sean’s question: I have a personal guarantor to my main borrowing entity. That guarantor also has ownership stake in 6 other partnerships/s-corps. To look at the global cash flow of my...
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Ready for recession?

Increasing credit risk in banking as economy hums along

How do bankers plan to maintain credit risk readiness in a good economy but with trouble on the way?
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Schedule B Interest: Pass-through or Cash Flow?

Patrick’s question: In your manual, Tax Return Analysis: Fundamentals and 1040, you state that interest from a partnership or S corporation can represent payments on a loan made to the...
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Cash Flow Depreciation Module for Bankers

Depreciation confusion: What if you start with Net Income per books?

Jenifer’s question: We recently purchased new software that has a different approach to adding back depreciation on a 1065 return. In the past, I added back Line 16A (Depreciation including that...
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Tax Return Analysis - Military Pay

Is military retirement pay always taxable?

Alyssa’s question: Does military retirement income show on the tax return? I have a borrower who listed this information on their application, but I do not see it on the Tax Return. Linda’s...
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Cash Flow Depreciation Module for Bankers

Add-back Depreciation with Lease-to-Own?

Carrie’s question: Any suggestions on underwriting lease to own companies (that lease household items, appliances, etc.). I have one that we are working on and they account for the items as fixed...
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