Posted on: 03rd Dec, 2009 12:37 pm
when we applied for a refi the lender said if we had more depreciation and less in the other write offs we could possibly get the loan. if this is true would 2009 taxes be enough of a positive to get a refi since 2008 shows a negative due to write offs. also if you claim more depriciation and the lender can turn that into a positive why cant they turn other write offs into positives if you have bank statements and credit to prove you pay your bills on time and that you have money.
depreciation is a paper loss. other writeoffs are real losses - expenses are real bills paid, for example, costs of materials are real, etc. that's why they cannot be added back.
generally, with a self employed borrower, two years' tax returns are reviewed, and an average taken. so your 2009 taxes would have to show a substantial difference over 2008 in order to compensate for the lower income shown in 2008.
generally, with a self employed borrower, two years' tax returns are reviewed, and an average taken. so your 2009 taxes would have to show a substantial difference over 2008 in order to compensate for the lower income shown in 2008.