Cash Flow Analysis of K-1s: Count ordinary business income?
Oscar asks: My borrower is a 50% shareholder for a business filing a 1120S. The K-1 indicates $276,970 in ordinary business income and $176,914 in Distributions. I'm giving him the $176,914...
View ArticleUnderstanding Tax Return Analysis and Nominee Income for Credit Analysts: Can...
Your question: What is 'Nominee' income and how do I treat it? Linda says: Ignore the expense and the associated income. The post Understanding Tax Return Analysis and Nominee Income for Credit...
View ArticleWhen Capital Gains Rules Camouflage the True Cashflow: 1065 K-1
Mike's question: I have a borrower who derives a large percentage of her cash flow from capital gains. She shows a $404M capital gain from sale of ownership in an entity. On the k-1 the entity shows a...
View ArticleUnderstanding Partnership Interests: CPA Tony Mailhot on Negative Basis and...
My friend, Tony Mailhot, is a CPA who knows more about taxes than anyone else I know. I asked him for his take on a recent question Mike asked me about capital gains. What I liked about Tony's answer...
View ArticlePass-Through from a K-1: Count Qualified Dividends?
Amy Asks If a 1065 K-1 reports qualified dividends paid to an individual partner in the amount of $50,000, and that same amount is shown on the partner’s 1040 tax return, schedule B, is this considered...
View Article8 Lender Lessons Learned (?) from the Credit Crisis
I am not at all sure lessons have been learned...yet. You'll find a good list, though, in the Feb 2009 RMA Journal article by J. Tol Broome Jr, EVP and Specialized Lending Group manager of BB&T in...
View Article2 NEW C's of Credit! Apply these in your business borrower relationships
The six Cs of Credit (or 3 or 5) are taught to every lender when they first start out. Here are some: Character Capacity Capability Cashflow Collateral The post 2 NEW C's of Credit! Apply...
View ArticleIs Schedule B Interest Pass-through or Cash Flow?
Patrick AsksIn your manual, Tax Return Analysis: Fundamentals and 1040, you state that interest from a partnership or S corporation can represent payments on a loan made to the entity and for which the...
View ArticleDouble-Counting Capital Gains Income from a 1065 K-1
Jackie asks: My bank has a lot of financial services clients who participate in investment vehicles (private equity/venture capital funds) that issue a 1065 K-1. In our goal to give them credit for the...
View ArticleNon-obligated entities. Is the K-1 enough?
Sean’s question: I have a personal guarantor to my main borrowing entity. That guarantor also has ownership stake in 6 other partnerships/s-corps. To look at the global cash flow of my borrowing entity...
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