Prepare Form 1040, Sch. 1, Sch. A, Sch. E, Sch. SE and the Qualified Dividends and Capital Gain Tax Worksheet for 2021 for Ryan and Rebecca Reed. No other forms are required. Although these forms will reference other form numbers, those other forms not listed above are NOT required. In addition to the above listed forms, the computation of ordinary tax is required. Projects can be completed manually or typed into the fillable PDF Forms. READ CAREFULLY!
These are available in Canvas > Assignments > Project #2
Due Date: The project must be submitted through Canvas by 11:59pm on Wednesday, December 8.
Please Note: As the syllabus indicates, these are individual projects; not group projects! If you need additional assistance, contact me. You are free to utilize the textbook and the form instructions for help. Find all instructions at https://www.irs.gov. No tax preparation software such as may be used. 2021 forms are not available at this time; therefore, we will be using the 2020 forms; however, we will be using the tax rate schedules and other key amounts from 2021 that we have learned in class this semester.
See additional information under “Hints”. If you have any further questions, please ask!
Ryan Reed, a marketing analyst, SSN 484-46-4793 and his wife, Rebecca, an actuary, SSN 484-55-4884 have hired you, a tax preparer at UNO, LLP to prepare their 2021 tax return. They are both 42. They have 2 sons; River, DOB 7/14/07; SSN 111-48-9976 and Ryker, DOB 4/17/12; SSN 884-97-1257. Their home address is 789 One Tree Hill,
Omaha NE, 68114.
They have the following income items in 2021:
Qualified Dividends from Pacific Corp: $325
Nonqualified Dividends from Atlantic Corp: $175
Rebecca’s wages (reported on Form W-2, Box 3): $50,000
Ryan’s wages (reported on Form W-2, Box 3): $36,000
Interest from First National Bank: $200
Long-Term Capital Gain from TD Ameritrade (Sch D is not required) : $1,700 Flow-through ordinary income for Rebecca from ZZ Partners, EIN 47-1122446: $9,800. This is reported on Sch K-1
(Form 1065) Box 14A (non-farming). This income is subject to self-employment tax and is non-passive. Rental income and expenses from 195 Tree Hill Circle, Omaha, NE 68114, a single-family residential rental house they jointly own, actively participate and manage, and was rented all of 2021 as follows:
Total Rent Received: $20,000
Repairs and Maintenance: $9,500
MACRS Depreciation: $5,000
Mortgage Interest: $7,700

Real Estate Tax: $4,500
Insurance: $1,200
Utilities: $2,200
There is an $4,000 suspended loss carryover on this rental from 2020. Use AGI before passive activities for any
rental loss phase-outs. You will compute the deductible amount of a rental loss, if applicable, on Sch E, line 22. Do
not complete Forms 6198 or 8582. Use your knowledge from class, notes, and book regarding the special rules for
real estate activities.
They have the following deduction items in 2021:
Mortgage interest on home: $14,200; outstanding balance 12/31/20 was $320,000. (Reported on Form 1098)
Real Estate Taxes on home $4,200
Medical Expenses (paid with after-tax dollars): $7,200
State Income Taxes withheld from Rebecca’s paychecks: $3,000
State Income Taxes withheld from Ryan’s paychecks: $1,600
Charitable Donations to St. Andrews Church: $3,200
Property Taxes on vehicles: $800
Investment management fees paid: $1,300
General sales taxes paid per IRS Tables $1,400
Other information:
 Rebecca had $2,400 in federal withholding from her W-2 wages and Ryan; $1,800.
 They would like any refund direct deposited to their checking account. Routing number 100900800 and
Account number 123456789.
 UNO, LLP’s address is 1040 South 102nd Street, Omaha, NE 68166, and their EIN is 14-7598461. Your
PTIN is P11223355.

Answer rating: 100% (QA)

To prepare the tax return for Ryan and Rebecca Reed for the tax year 2021 we will need to complete Form 1040 along with Schedules 1 A E and SE as well ... View the full answer