Rebecca and Walter Bunge have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Rebecca is a homemaker and Walt is a high school teacher. Rebecca's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Walt's earnings from teaching are:
Earnings from Las Vegas School Dist.....................................$50,000
Federal income tax withheld...................................................5,000
State income tax withheld............................................................0
In addition, Walt was covered under the Nevada State Teachers' Pension Plan. The Bunges incurred the following expenses during their move from Maine to Nevada in January of 2012:
Cost of moving furniture.......................................$4,300
Transportation (3,235 miles at $.23) ..............................744
Lodging en route.....................................................150
Meals en route.........................................................90
House-hunting trip before the move................................750
Walter's previous job, as a high school teacher in Maine, was only 5 miles from his home. Rebecca was unemployed prior to the move.
The Bunges own a ski condo in Utah. The condo was rented for 40 days during 2012 and used by the Bunges for 10 days. Pertinent information about the condo rental is as follows:
Rental income..................................................$6,000
Mortgage interest................................................4,800
Homeowners association dues.................................2,000
Utilities............................................................1,000
Maintenance ......................................................2,800
Depreciation (assume fully depreciated) ............................0
The above amounts do not reflect any allocation between rental and personal use of the condo. The Bunges are active managers of the condo.
Required: Complete the Bunge's federal tax return for 2012. Use Form 1040, Schedule E, Form 3903, and any other appropriate schedule(s) you need from pages 4-45 through 4-48 to complete their tax return.