Introduction Have you ever come across something called a “Section 461(l) excess business loss adjustment” on an individual tax return and wondered what it is? We recently received a call on the Bukers Hotline about this item and whether it should be included in cash flow. On this week’s cash flow article, let’s explore what…
Have you ever encountered an unusually large dollar amount on an individual’s tax return that made you stop and think twice? Recently, an analyst had this situation occur and called in to the Buker’s Hotline for assistance. On this month’s cash flow article, let’s explore their scenario and the appropriate cash-flow adjustments required. Unusual Tax-Exempt…
The other day, an analyst called in to the Bukers Hotline asking about some items that were reported on their individual borrower’s Schedule D. They wanted to know whether their borrower’s capital gain was recurring or non-recurring, and what the associated cash flow adjustments should be. On this week’s cash flow article, let’s review the…
An analyst recently called into the Bukers Hotline with a unique situation. A borrower, who hadn’t yet filed their 2024 tax return, submitted their 2024 W-2 for cash flow analysis. When spreading the salary information directly off the W-2, the analyst noticed that the amount in Box 1 was significantly lower than what was reported…
An analyst reached out to us recently on the Bukers Hotline with a question about the Family and Medical Leave Act (FMLA) and how it may affect their borrower’s cash flow. The borrower told the analyst that their W-2 wages were going to appear lower than expected on Page 1 of their tax return, but…
We recently received a call on the Bukers Hotline from an analyst who was spreading a prospective borrower’s individual tax return and noticed some unusual sources of income. The analyst told us that they received Form 8992 and Form 5471 along with the tax return package submitted by the borrower. Their question to us was…
We recently received a call on the Bukers Hotline from an analyst who was spreading a business return of a partnership entity that was owned by a married couple. The analyst was reviewing the Schedule K-1s issued from the partnership to the two individuals and noticed that the recipient was listed as “Jane Doe Trust”…
We recently received a call on the Bukers Hotline from an analyst working on spreading a trust with a Form 1041. The analyst noticed a few different line items on the first two pages of Form 1041 that appeared to resemble distributions made from the trust entity. We helped show that these line items were…
We recently received a call on the Bukers Hotline from an analyst who was spreading a Schedule C for a sole proprietorship. The analyst noticed an item of Other Expense listed in Part V titled “Section 465(d) carryover.” Their question to us was: What is this item of expense and how does it affect cash flow? …
Last month, we discussed how to avoid pitfalls on Schedule E related to passive activity losses. We are going to look at the same analyst’s question, but this time we will emphasize the potential pitfalls related to income or loss from pass-through entities. Let’s start by reviewing the details of the analyst’s question. We received…