Fannie Mae – Self Employed-Meals and Entertainment Deduction- Why does the FNMA Cash Flow Analysis require us to deduct “meals and entertainment” when this is already accounted for in the net income/loss?

Answer: This is a good question because it doesn’t seem logical until you understand IRS rules for deduction of meals and entertainment. When self-employed borrowers show a deduction on their taxes for “deductible meals and entertainment”, they deduct this amount and it lowers the Net Profit or adds to the Net Loss. On the FNMA form [...]