I need to show 6k in profit on my 2022 tax returns, how do I go about it?

[Mario Morales]

I need to cash out refi this year, to pay down some hard money loans, my DTI took a beating. My lender wants to see 6k of profit between 3 properties. I asked my CPA, his reply below.

Can you define “profit”? Is that the net number on Schedule E? Or is the net number and adding back depreciation?

I reached out to my lender as well but wanted some more advise. Thanks!

[Jon Puente]

Hey Mario, 

If you are hesitant on showing income on your taxes because you do not want to pay taxes (which I understand), why dont you try a DSCR Loan Cash Out refi?

If you have substantial equity in one of the properties, or at least enough so that you can tap into it, and still keep your DSCR ratio at 1:1, then you wouldn't have to worry about this at all. DTI is not a factor on DSCR loans and DSCR rates aren't that much worse than a normal Conventional Cash out right now. It would make this scenario much easier on you come tax time.

Just a thought!