Event Calendar

Monday, February 25, 2019

Determining Cash Flow from Personal Tax Returns After 2018 Tax Reform Part 2: Schedules D, E & F

Start Date: 2/25/2019 1:00 PM MST
End Date: 8/25/2019 2:30 PM MDT

Organization Name: Independent Bankers of Colorado

Tara F. Hunter
Phone: 303-832-2000

Determining Cash Flow from Personal Tax Returns After 2018 Tax Reform Part 2: Schedules D, E & F
1:00 pm – 2:30 pm MT

With the 2018 Tax Cuts and Jobs Act there are important tax law changes and some of the IRS tax forms are hardly recognizable.  Even experienced lenders and credit analysts will feel like they’re starting over.  The good news is that the basic concepts are the same.  Tax returns show taxable income.  But borrowers don’t repay debt with taxable income; they use cash flow.  The trick is learning how to obtain a reliable monthly or annual cash flow from a personal tax return.  Incorrectly estimating cash flow from a tax return can result in bad loan decisions – or missed opportunities.  Once you’ve properly converted taxable income into cash flow, that information can be used in your credit scoring model, debt-to-income ratio, or disposable income calculation.
Designed for consumer and commercial lenders, this two-part series will teach you an easy, reliable method to convert a borrower’s personal tax return (Form 1040) into a cash flow statement using the free software included with this course.  Part 2 will cover Schedule D (Capital Gains and Losses), Schedule E Page 1 (Rental Real Estate and Royalties), Schedule E Page 2 (Income or Loss From Partnerships and S Corporations), and Schedule F (Profit or Loss From Farming).  (Note:  This method does not follow Fannie, Freddie, or QM rules used in mortgage lending.)

  • Schedule D:  Are these sales/gains recurring, qualifying incomes or one-time gains?
  • Schedule E Page 1:  More than adding back depreciation, find the real cash flow from rentals and royalties
  • Schedule E Page 2:  Most information ‘passed through’ from partnerships or S corps doesn’t represent cash flow – learn to distinguish phantom income from real cash flow
  • Schedule F:  How to identify hidden income in farm tax returns
    • Free copy of Lenders Tax Analyzer© software
    • Employee training log
    • Quiz to measure staff learning and a separate answer key

This informative session is designed for anyone in the lending area including chief lending officers, service representatives, loan sales staff, new accounts personnel, loan officers, loan underwriters, credit analysts, loan processors, branch managers, CEOs, and other key lending staff.

Continuing Education: Attendance verification for CE credits upon request.

This program is the second of two in a series
Determining Cash Flow from Personal Tax Returns After 2018 Tax Reform Part 1:
Schedules A, B & C

Thursday, January 24, 2019

NOTE:  All materials are subject to copyright. Transmission, retransmission, or republishing of any webinar to other institutions or those not employed by your financial institution is prohibited. Print materials may be copied for eligible participants only.


Tim Harrington, CPA
TEAM Resources
Tim Harrington is a Certified Public Accountant, author, and consultant who has specialized in working with community financial institutions since 1992. Since 1996, Tim has been President of TEAM Resources, a firm which provides consulting, strategic planning, and training from coast-to-coast.
A presenter at over 1,000 financial conferences, seminars, and webinars, Tim has provided consulting and training for hundreds of community financial institutions in nearly every state and four countries. Tim advises boards and senior management teams on strategy, profitability, and governance and works with staff on leadership and lending. Tim’s book “Eisenhower on Enlightened Leadership” has been used by many boards and management teams to improve internal leadership. In addition, he is a faculty member of three financial institution schools and is the author of the popular lending software “Lenders Tax Analyzer.”