Kathy Kennedy (age 44) is a single taxpayer and she lives at 212 North Pine Way, Payson,

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Kathy Kennedy (age 44) is a single taxpayer and she lives at 212 North Pine Way, Payson, AZ 85541. Her Social Security number is 467-98-9784. Kathy's earnings and income tax withholding as the principal of the local high school for 2012 are:
Earnings............................................$55,000
Federal income tax withheld.......................8,800
State income tax withheld............................700
Kathy's other income includes qualifying dividends on New Mexico Public Service stock of $4,000 and interest on a certificate of deposit at Payson National Bank of $275. In April 2012, Kathy paid $450 due on her 2011 Arizona state income tax. During the year, Kathy paid the following amounts (all of which can be substantiated):
Home mortgage interest...............................................$9,300
MasterCard interest........................................................550
Life insurance (whole life policy) .......................................750
Property taxes on personal residence.................................1,350
Blue Cross medical insurance premiums...............................250
Other medical expenses...................................................560
Income tax preparation fee................................................300
Charitable contributions (in cash) .......................................750
Kathy had one stock transaction in 2012. Kathy received the following 1099-B from her sale of Gold Company stock. All stock sales must be reported both to taxpayers and to the IRS on Form 1099-B so the proceeds can be matched by the IRS to each tax return. Kathy purchased the stock on August 31, 2011, for $42,800 before the stock plummeted in the last months of 2011.
Kathy Kennedy (age 44) is a single taxpayer and she

On January 28, 2012, Kathy sold raw land for $150,000 (basis to Kathy of $90,000). The land was purchased 6 years ago. She received $30,000 as a down payment and the buyer's 10-year note for $120,000. The note is payable at the rate of $12,000 per year plus 8 percent interest. On January 28, 2013, the first of the ten principal and interest payments is due.
Required:
Complete Kathy's federal tax return for 2012. Use Form 1040, Schedule A, Schedule B, Schedule D, Form 8949, the worksheet, and Form 6252 on pages 8-67 to 8-77 to complete this tax return. Make realistic assumptions about any missing data.

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Related Book For  answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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