Selling Guide

Published June 3, 2020

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

View All Selling Policy Updates

Download PDF

Hint: Ask in a form of a question.

For best results, pose your search like a question.

B3-3.3-06, Income or Loss Reported on IRS Form 1040, Schedule F (04/01/2009)

Introduction

This topic contains information on income or loss reported on IRS Form 1040, Schedule F.

 

Income or Loss Reported on IRS Form 1040, Schedule F

Income received from farming is calculated on IRS Form 1040, Schedule F, and transferred to IRS Form 1040.

 

Note: Other income on Schedule F may represent income that is not obtained from the borrower’s farming operations.

 

The lender may need to make certain adjustments to the net income amount that was transferred to IRS Form 1040. For example, certain federal agricultural program payments, co-op distributions, and insurance or loan proceeds are not fully taxable, so they would not be reported on IRS Form 1040. These income sources may or may not be stable or continuous and could be a one-time occurrence.

If the lender verifies that the net income amounts that were transferred to IRS Form 1040 are stable, consistent, and continuing, the borrower’s cash flow must be adjusted by the nontaxable portion of any recurring income from these sources. Otherwise, the income must be deducted from the borrower’s cash flow.

The lender can adjust the borrower’s cash flow by adding the amount of any deductions the borrower claimed on Schedule F for depreciation, amortization, casualty loss, depletion, or business use of his or her home.

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles

B3-3.3-01, General Information on Analyzing Individual Tax Returns (06/05/2019)

IntroductionThis topic contains general information on analyzing individual tax returns.  Analyzing Individual Tax ReturnsIn analyzing a self-...

Read more

B3-3.3-02, Income Reported on IRS Form 1040 (05/15/2012)

IntroductionThis topic contains information on income reported on IRS Form 1040, including: Overview  Wages, Salary, and Tips  Interest and...

Read more

B3-3.3-03, Income or Loss Reported on IRS Form 1040, Schedule C (04/01/2009)

IntroductionThis topic contains information on income or loss reported on IRS Form 1040, Schedule C, including: Income (or Loss) from a Sole...

Read more

Have guide questions? Get answers to all of your policy questions, straight from the source.

Get Started
X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.