Capital Gains Income
Income received from capital gains is generally a one-time transaction; therefore, it should not be considered as part of the borrower’s stable monthly income. However, if the borrower needs to rely on income from capital gains to qualify, the income must be verified in accordance with the following requirements.
Document a one-year history of capital gains income by obtaining copies of the borrower’s signed federal income tax returns for the most recent one year, including IRS Form 1040, Schedule D.
Develop an average income from the last one year (according to the Variable Income section of General Income Information), and use the averaged amount as part of the borrower’s qualifying income as long as the borrower provides current evidence that they own additional property or assets that can be sold if extra income is needed to make future mortgage loan payments.
Note: Capital losses identified on IRS Form 1040, Schedule D, do not have to be considered when calculating income or liabilities, even if the losses are recurring.
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