I would claim the income and pay more taxes to make the tax return look great to the lenders so you have a higher borrowing power for low interest rate of 5%.
The cost of HML is much higher than the “extra tax” you pay.
You should not lie on a tax return in hopes of qualifying for a larger loan/mortgage. Doing so may be considered mortgage fraud.
You may want to consider being less aggressive on expenses relating to your farm business by doing things such as taking regular depreciation instead of bonus depreciation/section 179 expense if applicable.
I do not mean to ask you lie on the tax return.
I meant the same, take less expenses to make the tax return look good.
Many people write down as much expenses as they can try to minimize the tax, but this will hurt their borrowing power
I heard stories that people lie and didn’t report their actual higher self employ income to avoid higher tax.
But their lies on not reporting their higher income in fact does hurt their borrowing power.
thanks, yes basically I was wondering if I should be less aggressive. I don't want to lie, but was curious as to using a HML vs paying more tax. seems like it is pretty clear I should just be less aggressive, I appreciate everyone's insight!
And .maybe I should count my repairs as depreciation instead of straight deductions. basically wait to advertise it for rent, so it wouldn't be deductible.