Video instructions and help with filling out and completing Where Form 4797 Worksheet

Instructions and Help about Where Form 4797 Worksheet

Welcome to this choice lending Corp tutorial for the rental income worksheet you will complete this worksheet in order to calculate the rental income when you have borrowers with the rental properties that are listed on their Schedule E in their 1040 taxes this worksheet will help you determine what income can be used for qualifying purposes so let's begin you will start by putting your name the borrower's name and the loan number if you have it below is the property address and here is the part of the worksheet where you will begin to put in the figures from the Schedule E and as you can see I've provided a sample Schedule E for this demonstration so here is gross rent received it's very easy you can see it says go to line three when we do it's twenty thousand 188 you input the figure in this area total expenses line twenty just follow over expenses twenty four five seventy two you'll notice as we enter in figures that the worksheet begins to calculate the total adjusted gross and your net cash flow amortization casually lost one-time expense h away you won't see these too often and when you do it we generally be on another statement sheet sometimes listed here on line nineteen insurance line nine come here 6:45 mortgage interest line 12 49 57 taxes line 16 34 61 and finally depreciation line 18 10,500 as when we've entered in the last figure you can see that our total adjusted gross is here and the number of months the rental income expenses being reviewed is 12 months in this case because we're just doing one year and so our monthly gross rental income or loss is 1260 492 per month however we do need to put in the full piti payment in this case it's 970 632 and now your net cash flow for this property is 288 dollars and 60 cents which will be used for income qualifications so let's add another year quickly and we'll lower the gross of just a little bit and then leave everything else the same which you can see now is that here the total adjusted gross income has been changed to reflect the total of 2012 and 2011 the monthly gross rental income or loss has changed as well however because we are now doing two years 2012 and 2011 we will change this from 12 months to 24 months when we do our net cash flow changes to reflect all of the figures for both years and 240 693 is now your new figure for income calculations on this property be aware that if you have declining income in this case we will add we will take it up a thousand you will notice here that this total adjusted gross for 2011 is more than 2012 therefore for calculation purposes you have to use the worst year which is 2012 and so you'll be using the fifteen 179 it does not add in the prior year however instead of using 24 months as your review period it would be 12 months and now you can see that your new net cash flow is the 288 sixty this worksheet will accommodate two properties so if you have more properties use another sheet this properties worksheet will need to be submitted with your loan file so we expect to see that in the loan file and that gives processing underwriting and management an overview of how you determine the income and it also helps you to qualify your clients more accurately thank you