pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I understand your point but at the same time I don't believe that any lender would consider savings withdrawals as income.
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Perhaps it will make leasing that Mercedes more difficult but that inconvenience doesn't magically change after-tax savings withdrawals into income! If you take $100k our of your pre-tax account you can legitimately claim it as being income because an authority, the IRS, says that it is income (since it has never been taxed). Oddly, even if you just do Roth conversion, effectively moving it from one pocket to another, you could defend it as being income because the IRS says that it is. I agree it is semantics to a large degree but you will be asked to sign that whatever your report as your income to the best of your knowledge and belief and I think it would be hard to defend the after-tax savings withdrawal as income.... with the others you can just claim that you are using income as reported on your tax return and you can provide the tax return as proof.
Well, look at it this way.... say someone has $15k of SS and a $1m after-tax stock portfolio that throws off $20k a year in dividends.... their income is $35k.... but I'm guessing that the Mercedes dealer will find a way to make the deal once you explain the situation and your ability to make the payments.
OTOH, let's say that you claim $115k of income and they request some details... then what are you going to do? Also, I assume that you'll be asked to sign the application with $115k of income as being true to the best of your knowledge and belief or something like that... are you comfortable doing that? What are the consquences if they find out and in their view your income is really only $15k?
But you just said you would explain it, and then they would allow it. So they must be considering it as "income-like". That's what I consider them to be asking, to make sure I get a chance to explain it.I understand your point but at the same time I don't believe that any lender would consider savings withdrawals as income.
I see your point but I don't see the practical difference between withdrawing $100K from an after tax account or from a pre-tax account. To me you can call both of them either income or not-income, but you can't split hairs and call one not-income just because you paid the tax years ago instead of on this year's 1040.
I do think we're getting out in the weeds on words and technicalities however.
As I've said, as a practical, day-to-day matter, I'm clear on what my actual income is. I was more interested in how people might view their various income streams especially in cases where there is a big delta between what they get to spend and what they actually report to the IRS.
Based on other threads, for retired folks trying to qualify for house loans, they were given the advice to set up automatic distributions from their investment companies. The lenders don't care about taxable income, they care about $ that you have coming in each month to pay the bills. If you put down $15K, they're not going to give you a loan for a car, truck, RV, or home.As I understand it you are looking for what to include in income in leasing a car... so you need to conform to their definition of what income is... not what your definition of income is.... and I'm 99.99% sure that their definition of income will not include taxable account withdrawals.
I agree with RunningBum and marko. You have to think beyond GAAP and tax definitions... and actually answer the question that's being asked. Being defensible and verifiable does not make it meaningful in every context.
It does seem that credit companies will accept documentation of regularly scheduled equal withdrawals from taxable assets as an income stream, just like they accept regular IRA withdrawals as an income stream.Based on other threads, for retired folks trying to qualify for house loans, they were given the advice to set up automatic distributions from their investment companies. The lenders don't care about taxable income, they care about $ that you have coming in each month to pay the bills. If you put down $15K, they're not going to give you a loan for a car, truck, RV, or home.
Just like credit score companies don't care about your assets, only your use of credit.
It depends on who needs to know your annual income and why.
I consider my WR + pension to be my income.
I suppose you could flip it around (after having nailed that Mercedes lease) and realize that a $100K W/D from cash and a $15K SS income could qualify you for a number of free social services, starting with ACA.
If my disabled brother's income were lower he'd be able to get a lot of free services based on income, not assets.
It does seem that credit companies will accept documentation of regularly scheduled equal withdrawals from taxable assets as an income stream, just like they accept regular IRA withdrawals as an income stream.
Yes, it's their perception. Not mine. Or yours.The point is if you're asking them for credit (like in a lease) you need to conform to their perceptions of what income is, not yours (unless you don't care if you are approved or not).
Their source, a bit surprisingly, is from nerdwallet.com https://www.nerdwallet.com/blog/credit-cards/report-income-credit-card-application/Other sources of income can include money from investments or retirement savings, Social Security income, scholarships, grants and trust fund distributions.2
What counts as income
...
- Retirement fund distributions
Lots of people here qualify for ACA because their taxable income is quite low as they live off savings.
But nailing that Mercedes lease - what are you income declaration are you flipping around? Something you made up?
So if marko "scheduled" his $100K withdrawal once a year using his brokerage's online withdrawal tool system, that's OK as "income" for a credit application. But if he manually withdrew it once per year, it's not OK?
"Regularly scheduled equal withdrawals" from a taxable account can be started, stopped, and changed at any time. How is that really different from ad-hoc withdrawals?
An interesting discussion. I hadn't really thought of it too much, but I suppose I should wonder if I'm the only one to count money going from my investment accounts to my checking account as income. I see I'm not the only one, but plenty don't. I can live with that.This thread/subject has gotten a whole lot more complicated than I had anticipated!
Not substantively different but if he had a history of $8,333 withdrawn monthly it seems that they would count it as income but $100k whenever marko wants they won't count... silly but that is from the same folks who would consider Roth conversions to be income... so go figure.
The point is if you're asking them for credit (like in a lease) you need to conform to their perceptions of what income is, not yours (unless you don't care if you are approved or not).
whenever I am asked for income on an application of some sort I use what is shown as total income on our tax return... so in our case it includes interest, dividends, my pension, realized gains/(losses) and IRA withdrawals. And it will include 85% of SS once SS starts.
Yes, it's their perception. Not mine. Or yours.
An example from Discover: https://www.discover.com/credit-cards/resources/credit-card-application-form/
Their source, a bit surprisingly, is from nerdwallet.com https://www.nerdwallet.com/blog/credit-cards/report-income-credit-card-application/
They don't say anything about it being 1040 income. They use the terms "money" and "distributions", which can easily match the $100K part of the $115K in marko's example. You might try to apply a hard rule definition of this, but IMO they are leaving it slightly vague intentionally to allow for those people who have non-traditional sources of money that give them the financial means to pay off the loan in question.
An interesting discussion. I hadn't really thought of it too much, but I suppose I should wonder if I'm the only one to count money going from my investment accounts to my checking account as income. I see I'm not the only one, but plenty don't. I can live with that.
I do find it interesting that the footnote reference include retirement fund distributions but does not include money from investments which is mentioned in the Discover piece. (taxable account withdrawals I suppose).
It did seem odd that a credit card company... who I presume would be underwriting these credit card decisions... would reference a nerdwallet piece by a single staff writer as a source.... I would think Discover to be a more authoritative source than nerdwallet.
Not sure what your point is. A Roth transfer has the same characteristics. A withdrawal from a tIRA to my checking account doesn't change my net worth either. So I don't see how this is pertinent. I consider it a distribution from my investment account that I've made available for expenses, including repayment of loans.Seems more like a transfer to me... moving money from one pocket to another.... your net worth is unchanged... right?
... Not sure what your point is. A Roth transfer has the same characteristics. A withdrawal from a tIRA to my checking account doesn't change my net worth either. So I don't see how this is pertinent. I consider it a distribution from my investment account that I've made available for expenses, including repayment of loans.
Look, we can go around and around for days on this. You can come up with reason after reason why it doesn't count, and I can justify every one of them. GAAP applies to corporations, not individuals, from what I read, so I'm not accepting any GAAP rules or guidelines. Common sense tells me that what I make available for expenses should count as my income for rent, loans, etc. I believe it's in line with what they are asking for. If you don't, we disagree. Unless I get taken to court or have my credit card taken away for misreporting, we don't know who's right. I respect your background but I think you're not applying it correctly here.