The following additional information is available for the Albert and Allison Gaytor family. The Gaytors own a

Question:

The following additional information is available for the Albert and Allison Gaytor family. The Gaytors own a rental beach house in Hawaii. The beach house was rented for the full year during 2018 and was not used by the Gaytors during the year. The Gaytors were active participants in the management of the rental house. Pertinent information about the rental house is as follows:

Address: 1237 Pineapple St., Lihue, HI 96766

Gross rental income...............$20,000

Mortgage interest........................7,850

Real estate taxes.........................2,250

Utilities..........................................2,100

Maintenance................................2,400

The house is fully depreciated so there is no depreciation expense. Albert sold the following securities during the year and received a Form 1099-B that showed the following information:

for all sales. In addition to the above amounts, the Grapefruit mutual fund distributed a long-term capital gain of $450 on December 30, 2018. On January 12, 2018, Albert and Allison sold their personal residence for $715,150 and purchased a new house for $725,000. This was their personal residence before and after the divorce (they have lived in it together for three years since remarrying). The old house cost $120,000 back in January of 2006 and they added on a new bedroom and bathroom a few years ago for a cost of $20,000. They also built a pool for a cost of $60,000. They moved into the new house on January 19, 2018.

Required:

Combine this new information about the Gaytor family with the information from Chapters 1-3 and complete a revised 2018 tax return for Albert and Allison. Be sure to save your data input files since this case will be expanded with more tax information in later chapters.