Stated Income

Stated Income

A documentation rule where the borrower discloses income and its source but the lender does not verify the amount.

SeeDocumentation Requirements/Stated Income-Verified Assets.

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The passive or active nature of nonseparately stated income or loss passed through by an S corporation depends on whether the shareholder materially participates in the business's operations.
The passive or active nature of nonseparately stated income from an S corporation is determined by the level of shareholder involvement in the business's operation.
Determining deductibility of passive losses
This case illustrates the need to index the AMT brackets and exemption amounts; to allow regular tax credits against the AMT; to allow more itemized deductions in calculating AMT; and to exempt from the AMT families with regular tax--adjusted gross income under a stated income level.
Middle-class family falls victim to AMT
In addition to these sales, B generates $150,000 of nonseparately stated income.
S Corporations and the AMT credit
After the S termination year is divided into the two reporting periods, the separately stated items of income, loss, deduction or credit, and the amount of non-separately stated income or loss, must be divided between the periods.
Timing passthrough items when the S election terminates during a fiscal year
Interest expense incurred by an S corporation is passed through to shareholders as --trade or business expense (reduces the corporation's nonseparately stated income on page 1 of Form 1120S); --investment expense (passes through as a separately stated item and is subject to limitation at the shareholder level); --rental expense or as a component of any other passive gain or loss (reduces passive activity income from rental or other activity); and --other interest expense (passes through as a separately stated item; shareholder treatment is determined by reference to how the loan proceeds were used).
PAL rules and loan proceeds
"Industry analysis suggests up to 90 percent of stated incomes are exaggerated by 5 percent or more, and that 60 percent of stated incomes are inflated by more than 50 percent," said Romano.
CoreLogic unveils IncomePro to combat stated-income fraud

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