Question

Kent Pham, CPA, is a 45-year-old single taxpayer living at 169 Trendie Street, La Jolla, CA 92037. His Social Security number is 865-68-9635. In 2014, Kent’s W-2 as the controller of a local corporation showed the following:
Earnings from the Gentry Corporation........... $150,000
Federal income tax withheld............... 25,000
State income tax withheld................ 14,000
Kent’s other income includes interest from GMAC bonds of $3,250 and interest on CDs at The Cove Bank of $4,145. Also, Kent received tax-exempt interest of $37,960 on private activity bonds that is subject to alternative minimum tax.
During the year, Kent paid the following amounts (all of which can be substantiated):
Home mortgage interest................... $42,210
Home equity debt interest on loan used to purchase a Lexus... 6,800
Credit card interest.................... 2,280
California annual auto registration tax (deductible portion)..... 770
Auto insurance..................... 1,170
State income taxes paid in 2014 (for 2013).......... 16,302
Property taxes on personal residence............... 8,060
Blue Cross premiums.................... 2,340
Other medical expenses................... 1,025
CPA fees paid to handle 2010 IRS audit............. 9,100
Charitable contributions:
Tree-huggers Historical Society (a qualified charity)....... 1,040
Campanile Educational (a qualified charity)............ 12,000
Tecaté Orphanage (a Mexican organization)............ 500
Required:
Complete Kent’s federal tax return for 2014. Use Form 1040, Schedule A, Schedule B, and Form 6251, on Pages 6-59 through 6-64. Make realistic assumptions about any missing data.


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  • CreatedJuly 16, 2015
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