I think you can answer that question for yourself. Put yourself in the lenders place. You are going to loan money to this person. You want to get repaid. You want to know if the person is likely to have the income to repay you. What number are YOU going to look at?
Or as might be asked in Alice in Wonderland: “When is the income not income?” Answer: “When it is already committed to being spent.”
When lenders review the income of self-employed borrowers, the lenders look at the Tax Returns. But which income they use in determining the qualifying income ?
Do they use the GROSS reported income as the ?qualifying income? ?
Or do they use the NET reported income as the ?qualifying income? ?
In other words, if a self-employed person GROSSED $200,000; but NETTED only $30,000 (this is just an example), which figure would the lender look at to determine ?qualifying income? ?