Commercial Loan Qualification Issue and Tax Returns

[Joe Johnson]

Do you have to report all maintenance expenses on a duplex or apartment building on your tax return? I understand I would pay more taxes if I did not report all the expenses. However, my DTI looks better for qualifying for future loans if I do not report all the expenses and that is more important to me.

[Jim Kennedy]

That's in interesting approach but not your best option. When you sign your tax return, your signature is affixed to an affidavit that says (paraphrasing here) that everything on this return is true and accurate to the best of your knowledge, so if you leave off your expenses, it is a willful misrepresentation, which unfortunately is fraud, and fraud against the IRS is a felony offense, but it gets worse after that. You are also intentionally deceiving the mortgage company too, which drags in wire fraud and other charges too, so go with full disclosure and do your best. Look around and negotiate. 

Jim Kennedy