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

5 Replies

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! 


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.  

@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.

@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.

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.