Description:

Bankers underwrite loans primarily from tax returns, particularly at the community bank level. What reported income is actually cash flow? How can we properly assess a large capital gain (or loss)? What items on a Schedule K-1 involve cash inflows and outflows to our customer? How can we combine personal and business cash flow into a global cash flow? Using case examples and worksheets, this seminar covers how to analyze personal tax returns to develop cash flow within a simple, logical and consistent framework. It provides the tools needed to reduce voluminous amounts of forms and schedules into a concise, relevant picture of cash flow, both for personal situations and where global cash flow is appropriate.

Participants will learn:

  • The limitations of personal financial statements and why more information is needed
  • Why personal tax returns can be difficult to analyze and how to target relevant information consistently
  • Using tax return data to validate assets and liabilities, plus uncover unreported liabilities
  • Understanding the spectrum of situations, how some income (or loss) does not involve cash, plus and linking types of income/cash flow to the primary tax return schedules
  • Cash flow approaches for self-employed and small business owners using sample worksheets and cases
  • Overview of business entity choice issues
  • How pass-through entities impact cash flow
  • Examples of capital gains (and losses) and how to extract the cash flow involved
  • The concept of global cash flow and its pros and cons plus analytical issues
  • Recent tax law changes and likely effect on customers’ tax returns

Target Audience: 

Branch managers, consumer lenders, mortgage bankers, private bankers, small business lenders, commercial lenders, credit analysts, loan review specialists, special assets officers, lending managers and credit officers


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