Cap 1 QS Income Verification - self employed

[ILFarmer]

I recently applied for the cap 1 quicksilver visa no AF and got denied. E mailed CEO got a manual review and now I am approved once I verify my income.

I listed my income as 60k. That is an accurate average income for me. My issue is my 2013 income was not but half of that due too the way I had my grain marketed (I am a farmer, and I can sell grain long after the end of the year) due to tax reasons and market conditions much of the 2013 crop has been sold in 14. So 13 net income appears much less than the 60k.

Will this be an issue? Can I provide them with my gross income? I just don't think they will have a clue as to how a farmers income could be way down one year and way up the next.

Advice? Should be getting my letter next week on what they want to see and where to send or fax it.

[Uppingmyscore]

What's on your schedule k?

[ILFarmer]

I file a schedule F and net income was a little over 20k. I also have a small trucking and excavation business and net was around 12k I believe.

[Uppingmyscore]

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@ILFarmer wrote:
I file a schedule F and net income was a little over 20k. I also have a small trucking and excavation business and net was around 12k I believe.

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Is the 20k for this year or last year?  In am not a tax expert but I'm not sure if they will have a problem with unreported income (12k).  Trying calling and asking what is acceptable.  

[Uppingmyscore]

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@Uppingmyscore wrote:

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@ILFarmer wrote:
I file a schedule F and net income was a little over 20k. I also have a small trucking and excavation business and net was around 12k I believe.

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Is the 20k for this year or last year?  In am not a tax expert but I'm not sure if they will have a problem with unreported income (12k).  Trying calling and asking what is acceptable.  

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Is the 12k services render this year if so that's shouldn't be a problem.  But I would call them.  Keep me posted.

[ILFarmer]

The 12k is reported also. This is for 2013. So a total net income of 32k for 2013. I will call once I get the letter. I just don't want them to think me putting down 60k was a lie as in reality that is closer to what I expect to make on average year by year.

If I can go by gross it is much higher than the 60k.

[jMollys]

Here is my guess what will happen to verify  your income:

1) have you execute a 4506t for 2011, 2012, and possibly 2013.  The 2013 will be a non-issue unless your have already filed.

2) provide a p&l and balance sheet for 2013

Looking at Sec F from your personal 1040  Cap One is going to take line 34 and add back line 14 from the schedule.

They will then compare the two most recent years. One of two ways to calculate the income will happen by comparing two years.

1) most recent year is greater than previous year. - take the two and add together divide by 24 months. (example 2011 $30000  & 2012  40000  70000/24=2917 monthly)

2) most recent year is less than previous year - take most recent year and divide by 12  . ( example 2011 $40000  & 2012 30000  30000/12= 2500 monthly)

I should mention the same will apply to your other business assuming you file a Sec C. The only difference is this from Sec C:

Take line 31 and add back lines 12 and 13. They "might,' add back line 30 as well.

I hope this helps.

jMollys

[jMollys]

Up,

By K I think you are meaning K1. A K1 applies to a 1065 (partnership) or 1120s (s-corp.)  I like your thinking though.