Steve Jackson (age 51) is a single taxpayer living at 3215 Pacific Dr., Del Mar, CA 92014. His Social Security number is 465-88-9415. In 2012, Steve's earnings and income tax withholding as the manager of a local hotel are:
Earnings from the Ocean View Hotel..........................................$425,000
Federal income tax withheld......................................................115,000
State income tax withheld...........................................................40,000
Steve's other income includes interest from SDG&E bonds of $2,500 and interest on a savings account at Wells Fargo Bank of $3,190. Also, Steve received taxexempt interest of $29,200 on private activity bonds that is subject to alternative minimum tax.
During the year, Steve paid the following amounts (all of which can be substantiated):
Home mortgage interest...................................................$31,700
Credit card interest.............................................................1,760
Auto insurance......................................................................900
State income taxes paid in 2012 (for 2010 audit) .........................12,540
Property taxes on personal residence...............................................6,200
Kaiser HMO premiums....................................................................4,800
Other medical expenses......................................................................790
CPA fees paid to handle 2010 state audit...........................................7,000
Charitable contributions:
Girl Scouts...............................................................................................800
San Diego State University (contribution) ........................................10,000
Italian Red Cross.....................................................................................250
Required:
Complete Steve's federal tax return for 2012. Use Form 1040, Schedule A, Schedule B, Form 6251, and any other appropriate schedule(s) you need on pages 6-53 through 6-58. Make realistic assumptions about any missing data.