Dr. George E. Beeper is a single taxpayer. He lives at 45 Mountain View Dr., Apt. 321, Spokane, WA 99210. Dr. Beeper's Social Security number is 775-88-9531. Dr. Beeper works for the Pine Medical Group, and his earnings and income tax withholding for 2013 are:
Earnings from Pine Medical.........................................$116,000
Federal tax withheld....................................................25,000
State tax withheld..............................................................0
Dr. Beeper owns a rental house located at 672 Lake Street, Spokane, WA 99212. The house rents for $1,000 per month and was rented for the entire year. The following are the related expenses for the rental house:
Real estate taxes...........................................................$ 3,500
Mortgage interest..........................................................12,500
Insurance.......................................................................900
Depreciation (assume fully depreciated).....................................0
Gardening...................................................................1,000
Repairs.........................................................................600
Maintenance................................................................3,636
The house was purchased on July 5, 1979. Dr. Beeper handles all rental activities (e.g., rent collection, finding tenants, etc.) himself. During May 2013, Dr. Beeper transferred $67,000 out of his Section 401(k) plan from a former employer (Elm Medical Group) to an individual retirement account with the Spokane State Bank. The transfer was made directly from the Section 401(k) plan trustee to the bank.
Required:
Complete Dr. Beeper's federal tax return for 2013. 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.