Income Calculations
(Schedule Analysis Method)


Single-Family Seller/Servicer Guide (Guide) Section 5304.1(d) requires that Seller document calculation of a Borrower’s self-employed income on Guide Form 91 or a similar alternative form. This alternative form is a tool to help the Seller calculate a self-employed Borrower’s income; the Seller’s calculations must be based on the requirements and guidance for the determination of stable monthly income in Guide Topic 5300. This alternative form documents Seller’s calculation of self-employed income but does not replace the requirements and guidance for the analysis and treatment of the income for self-employed Borrowers as described in Guide Chapters 5304 and 5305.

For entries with the marker (+ / –), type a '–' for entering a negative amount. Example: –12,345.67.
 

IRS Form 1040 Federal Individual Income Tax Return     Yr     Yr
I. Income Calculations from IRS Form 1040

1. W-2 Income from Self-Employment (reported on IRS Forms 1040 and 1120 or 1120S)

Name of business:  

     IRS Form 1040, Line 7 (Section 5304.1(d)) $ (+) $ (+)
     Note: Validate with business returns and IRS Form 1125-E, Compensation of Officers,
     as applicable
Subtotal - W-2 Self-Employment Income $ $

2. Schedule B - Interest and Ordinary Dividends
     Recurring interest income (Chapter 5305) $  (+) $  (+)
     Recurring dividend income (Chapter 5305) $  (+) $  (+)
     Dividend income from self-employment reported on
     IRS Form 1120
$  (-) $  (-)
Subtotal - Schedule B, Interest and Dividends $ $

3. Schedule C - Profit or Loss from Business (Sole Proprietorship) (Chapter 5304)

  Name of Business #1:  

     Net profit or loss $  (+/-) $  (+/-)
     Non-recurring other income or loss, or expenses $  (+/-) $  (+/-)
     Depletion $  (+) $  (+)
     Depreciation $  (+) $  (+)
     Meals and entertainment exclusion $  (-) $  (-)
     Amortization or casualty loss $  (+) $  (+)
     Business use of home $  (+) $  (+)
Subtotal - Schedule C, Business #1 $ $

4. Schedule C - Profit or Loss from Business (Sole Proprietorship) (Chapter 5304)

  Name of Business #2:  

     Net profit or loss $  (+/-) $  (+/-)
     Non-recurring other income or loss, or expenses $  (+/-) $  (+/-)
     Depletion $  (+) $  (+)
     Depreciation $  (+) $  (+)
     Meals and entertainment exclusion $  (-) $  (-)
     Amortization or casualty loss $  (+) $  (+)
     Business use of home $  (+) $  (+)
Subtotal - Schedule C, Business #2 $ $

5. Schedule D - Capital Gains and Losses (Chapter 5305)

    Recurring capital gains and/or losses $(+/-) $(+/-)
 
Subtotal - Schedule D, Capital Gains and Losses $ $

6. Schedule E - Supplemental Income or Loss (Rents and Royalties) (Chapters 5305 and 5306)
     Rent and/or royalties received $  (+) $  (+)
     Total expenses $  (-) $  (-)
     Depreciation expense or depletion $  (+) $  (+)
     Amortization/casualty loss/non-recurring expenses $  (+) $  (+)
     If using the rental properties full PITI payment in qualifying ratios - add
     back insurance, mortgage interest and taxes
$  (+) $  (+)
Subtotal - Schedule E, Rents and Royalties $ $

7. Schedule F - Profit or Loss from Farming (Chapter 5304)
    Net farm profit or loss $(+/-) $(+/-)
    Non-taxable portion of recurring cooperative and CCC payments $ (+) $ (+)
    Non-recurring other income or loss $ (+/-) $ (+/-)
    Depreciation $ (+) $ (+)
    Amortation/casualty loss/depletion $ (+) $ (+)
    Business use of home $ (+) $ (+)
 
Subtotal - Schedule F, Farming $ $

 
Combined Total - IRS Form 1040 $ $

II. Income Calculations from IRS Schedule K-1 and IRS Form 1065

8. Partnership Income (Chapter 5304)

Name of business:  

Partnership - Schedule K-1, IRS Form 1065
    Ordinary business income or loss $ (+/-) $ (+/-)
    Net rental real estate income or loss $ (+/-) $ (+/-)
    Guaranteed payments $ (+) $ (+)
 
Subtotal - Schedule K-1, IRS Form 1065 $ $
Partnership Income, IRS Form 1065
     Depreciation (IRS Form 1065) $  (+) $  (+)
     Depreciation (IRS Form 8825) (Guide Section 5304.1(d)) $  (+) $  (+)
     Depletion $  (+) $  (+)
     Amortization or casualty loss $  (+) $  (+)
     Mortgage notes, bonds payable in less than one year (Section 5304.1(d)) $  (-) $  (-)
     Other non-recurring income or loss $  (+/-) $  (+/-)
     Travel and entertainment exclusion $  (-) $  (-)
Subtotal - Prior to Application of Ownership Interest Percentage $ $
     Multiply by Total Percentage of Ownership, Schedule K-1
     
Note: Enter a value between 0 to 100
    (x)     (x)
Subtotal - IRS Form 1065 $ $

 
Combined Total - Partnership $ $

III. Income Calculations from IRS Schedule K-1 and IRS Form 1120S

9. S Corporation Income (Chapter 5304)

Name of business:  

S Corporation - Schedule K-1, IRS Form 1120S
    Ordinary business income or loss $ (+/-) $ (+/-)
    Net rental real estate income or loss $ (+/-) $ (+/-)
 
Subtotal - Schedule K-1, IRS Form 1120S $ $
S Corporation Income, IRS Form 1120S
     Depreciation (IRS Form 1120S) $  (+/-) $  (+/-)
     Depreciation (IRS Form 8825) (Guide Section 5304.1(d)) $  (+/-) $  (+/-)
     Depletion $  (+) $  (+)
     Amortization or casualty loss $  (+) $  (+)
     Mortgage notes, bonds payable in less than one year (Section 5304.1(d)) $  (-) $  (-)
     Other non-recurring income or loss $  (+/-) $  (+/-)
     Travel and entertainment exclusion $  (-) $  (-)
Subtotal - Prior to Application of Ownership Interest Percentage $ $
     Multiply by Total Percentage of Ownership, Schedule K-1
     Note: Enter a value between 0 to 100
    (x)     (x)
Subtotal - IRS Form 1120S $ $

 
Combined Total - S Corporation $ $

IV. Income Calculations IRS Form 1120

10. Corporation Income (Chapter 5304)

Name of business:  

Corporation Income, IRS Form 1120
     Depreciation $  (+) $  (+)
     Depletion $  (+) $  (+)
     Amortization or casualty loss $  (+) $  (+)
     Net operating loss $  (+) $  (+)
     Taxable income or loss $  (+/-) $  (+/-)
     Total tax $  (-) $  (-)
     Mortgage notes, bonds payable in less than one year (Section 5304.1(d)) $  (-) $  (-)
     Other non-recurring income or loss $  (+/-) $  (+/-)
     Travel and entertainment exclusion $  (-) $  (-)
Subtotal - Prior to Application of Ownership Interest Percentage $ $
     Multiply by Total Percentage of Ownership
     Note: Enter a value between 0 to 100
    (x)     (x)
Total - Corporation $ $

Total - Stable Monthly Income
Seller's Calculation of Stable Monthly Income2     Yr     Yr
 
Sum of Combined Subtotals $ $
 
Total Income for Both Years $
Divided by number of months
Note: Enter number of months and click the '=' button to see the total
     $

Manually Input Data Below if Using a Different Total Income to Determine Stable Monthly Income
Total Income Used to Determine Stable Monthly Income1
$
Comments:
Divided by number of months1
     $ 2
1Manual input: The Seller must determine the appropriate amount of income to use based on the requirements and guidance for the analysis and treatment of income for self-employed Borrowers as described in Chapters 5304 and 5305.
2The Seller must determine that the total stable monthly income meets the requirements and guidance for the determination of stable monthly income in Topic 5300.

   

Income Calculations (Schedule Analysis Method) 08/9/17