using tax returns instead of 75% of rents for Debt to Income ratio

[Paul M.]

I've heard that if you've owned a rental property for awhile banks will use your tax returns instead of using 75% of rents when counting debt to income ratio.

Questions:
1) Will they just use the rents on the return or will they look at actual expenses? Will you be penalized if one year alot of things broke or you made a bunch of small improvements that were not capitalized?

2) Will they make any adjustments for vacancy or will they assume that whatever rents you reported will be what will happen in the future?

3) How many years tax returns are they using? Just the most recent?