Question

Professor Patricia (Patty) Paˆte´ is retired from the Palm Springs Culinary Arts Academy (PSCAA). She is a single taxpayer and is 68 years old. Patty lives at 98 Colander Street, Henderson, NV 89052. Professor Paˆte’s Social Security number is 565-66-9378. Patty receives monthly retirement benefits from her PSCAA retirement plan. Earnings and income tax withholding shown on her retirement 2014 Form 1099-R are:
Gross distribution and taxable amount............ $61,200
Federal tax withheld................... 7,350
State tax withheld.................... 0
Patricia owns a rental condo located at 392 Spatula Way, The Lakes, NV 88905. The condo rents for $850 per month and was rented for the entire year. The following are the related expenses for the rental house:
Real estate taxes............. $2,725
Mortgage interest............. 7,500
Insurance................. 410
Depreciation (assume fully depreciated) ... 0
Homeowners’ Association dues........ 1,540
Repairs................. 1,300
Gardening............... 2,090
The condo was purchased on August 31, 1977. Professor Pâté handles all rental activities (e.g., rent collection, finding tenants, etc.) herself. During March 2014, Patricia took a $75,000 distribution from her 401(k) plan. Patricia received only $60,000 because the 401(k) plan administrators withheld $15,000 federal income tax from the distribution. Forty-five days after the distribution, Patricia deposited $50,000 in a rollover IRA, keeping $10,000 of the $60,000 received in order to remodel her kitchen.
Required:
Complete Professor Paˆte´ ’s federal tax return for 2014. Use Form 1040, Schedule E, and Form 8582 on Pages 4-51 through 4-55 to complete this tax return. Do not complete Form 4562 for reporting depreciation. Make realistic assumptions about any missing data.


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  • CreatedJuly 16, 2015
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