Mortgage/Tax Question For a 1099 Realtor - Advise Needed!

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Mortgage/Tax Question For a 1099 Realtor - Advise Needed!

Adrian Peterson
Investor · Newport Beach, CA · Member since 2015 · 25 posts · 6 votes

My wife is looking to refinance a property she purchased more than 6 months ago. She is a CA Real Estate agent and receives a 1099 for her commissions. in 2018, she deducted a large write-off so that to avoid paying high taxable income. Consequently, the tax returns now show low income as a result of the write-off, thus disqualifying her from being approved for her refi.

Should our taxes have been structured differently? If so, please advise. Thanks! 

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  • Josh Bakhshi
    Real Estate Agent · Atlanta, GA · Member since 2015 · 359 posts · 158 votes
    7y

    Adrian,

    I am not a CPA, but this is a case that you can't have your cake and eat it too.  I would discuss this w/ a mortgage broker and a CPA to see if it makes sense to amend your taxes and the pros and cons of doing so.  If she has more than 2 years of 1099, the mortgage broker should be able to make a case for her.  

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  • Nicholas AiolaBusiness Member
    CPA & Investor · New York, NY · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    @Adrian Peterson You cannot manipulate your tax returns by intentionally failing to report deductions no matter what the intention is - that includes wanting to show higher income for purposes of qualifying for a loan. That would be tax fraud.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    Assuming her deductions were legitimate, her real income is, what her income is.

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  • Adrian Peterson
    OP
    Investor · Newport Beach, CA · Member since 2015 · 25 posts · 6 votes
    7y

    @Nicholas Aiola Not looking to commit tax fraud. Wondering if there are any savvy investors here in BP that know of a structure/strategy using other entities or strategies that would work. I know of several legal strategies that work for flipping houses that most flippers don’t know of. But with financing, I’m limited with my knowledge although I know there are good LEGAL strategies out there that few know of.

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  • Theresa Ortez
    Real Estate Agent · CA · Member since 2019 · 21 posts · 16 votes
    7y

    Adrian,  I'm a California licensed CPA, Realtor and investor.  I'm reading that your wife bought the property six months ago. I recommend going back to lender if the original purchase was financed. If she has more than two years of earnings, she should be able to provide write-up on one time deduction in 2018 to provide to underwriting.  Talk to a strong reputable lender.  Go back to CPA who filed return if you have questions about method of filing.

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