What Are Those Partnership & S-Corp Tax Returns Telling Me?

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Does it seem like a secret decoder ring is needed to convert business tax returns to cash flow? The confusion arises because tax returns were created to report taxable income, not cash flow – which is what is needed to qualify a borrower. Even more complexities arise when a tax return is for a Partnership or S-Corp because both are “pass-through” entities. The business does not pay taxes directly; instead, taxable income is passed through to the owners’ individual tax returns. A lender’s job is to disentangle the passed-through incomes, reassemble them for the business, then determine what net income can be used as qualifying income. 

Overestimating the income from a tax return can lead you to approve a weak loan that could result in hundreds of thousands of dollars in losses. Underestimating income can lead you to deny good loans that you need to grant. This webinar will help take the mystery out of Partnership and S-Corp tax returns and you’ll learn how to quickly and reliably identify a business’s real monthly cash flow.


  • What a ‘pass through’ entity is and how it affects tax reporting and cash flow
  • Identify income that was ‘passed through’ to an individual tax return, but earned by the business
  • The value of the Schedule K-1 in analyzing cash flow
  • Convert an accrual basis tax return to cash basis
  • Calculating global cash flow from tax returns


  • Cash flow conversion worksheet
  • Accrual to cash worksheet
  • Simple global cash flow worksheet
  • Employee training log
  • NEW – Interactive quiz

This informative session is designed for chief lending officers, service representatives, new accounts personnel, loan officers, loan underwriters, credit analysts, loan processors, branch managers, CEOs, and other key lending staff.

ABOUT THE PRESENTER – Tim Harrington, CPA, TEAM Resources
Tim Harrington is President of TEAM Resources and has been a financial institution consultant for over 27 years. Tim has advised lenders on verifying income from tax returns since 1992, and consults with financial institutions nationwide on issues of strategy, profitability, and board governance. He speaks at nationwide conferences and has presented in Canada, Mexico, Puerto Rico, Jamaica, and the Virgin Islands. Tim is the author of the popular software, Lenders Tax Analyzer. In addition, his book “Eisenhower on Enlightened Leadership” has been used by management teams nationwide to improve leadership skills. He did his undergraduate studies at Gonzaga University and graduate studies at the University of Washington. 

Originally recorded on August 14, 2019.

Recorded webinar is available until February 28, 2020.

Free Digital Copy included with purchase to download and view beyond link expiration date.

Price includes sales tax.