$2023$:

$12-43$

During the year, Beth received interest of $$300$ from Arizona FederalSavings and Loan and $$40$ from Arizona State Bank. Each financialinstitution reported the interest income on a Form $1099$INT$.$ Shereceived qualified dividends of $$800$ from Blue Corporation, $$750$from Green Corporation, and $$650$ from Orange Corporation. Eachcorporation reported Beth$$s dividend payments on a Form $1099$DIV$.$

Beth received a $$1,100$ income tax refund from the state of Arizonaon April $29,2023.$ On her $2022$ Federal income tax return, she usedthe standard deduction.

Line

Description

Amount

$1$

Wages, tips, other compensation

$$95,000\mathrm{.}00$

$2$

Federal income tax withheld

$15,500\mathrm{.}00$

$3$

Social Security wages

$95,000\mathrm{.}00$

$4$

Social Security tax withheld

$5,890\mathrm{.}00$

$5$

Medicare wages and tips

$95,000\mathrm{.}00$

$6$

Medicare tax withheld

$1,377\mathrm{.}50$

$15$

State

Arizona

$16$

State wages, tips, etc.

$95,000\mathrm{.}00$

$17$

State income tax withheld

$3,954\mathrm{.}00$

Fees earned from her part$-$time tax practice in $2023$ totaled $$7,800.$She paid $$600$ to have the tax returns processed by a computerizedtax return service.

On February $8,2023,$ Beth bought $500$ shares of Gray Corporationcommon stock for $$17\mathrm{.}60$ a share. On September $12,2023,$ Beth soldthe stock for $$14$ a share.

On January $2,2023,$ Beth acquired $100$ shares of Blue Corporationcommon stock for $$30$ a share. She sold the stock on December $19,2023,$ for $$55$ a share. Both stock transactions were reported to Bethon Form $1099$B; basis was not reported to the IRS.

Beth bought a used sport utility vehicle for $$6,000$ on June $5,2023.$She purchased the vehicle from her brother$-$in$-$law, who wasunemployed and was in need of cash. On November $2,2023,$ she soldthe vehicle to a friend for $$6,500.$

During the year, Beth records revenues of $$26,000$ from the sale of asoftware program she developed. Beth incurred the followingexpenses in connection with her software development business:

Cost of personal computer

$$7,000$

Cost of printer

$2,000$

Furniture

$3,000$

Supplies

$650$

Fee paid to computer consultant

$3,500$

Beth elected to expense the maximum portion of the cost of thecomputer, printer, and furniture allowed under the provisions of $179.$ These items were placed in service on January $15,2023,$ and used$100\%$ in her business.

Although her employer suggested that Beth attend an in$-$personconference on current developments in corporate taxation, Beth wasnot reimbursed for the travel expenses of $$1,420$ she incurred inattending the meeting. The $$1,420$ included $$200$ for the cost of meals.

During the year, Beth paid $$300$ for prescription medicines and$$2,875$ for doctor bills and hospital bills. Medical insurance premiumswere paid by her employer. Beth paid real property taxes of $$1,766$ onher home. Interest on her home mortgage $($Valley National Bank$)$ was$$3,845,$ and credit card interest was $$320.$ Beth

contributed $$2,080$ incash to various qualifying charities during the year. Professional duesand subscriptions totaled $$350.$

Beth wants to reduce her carbon footprint. In $2023,$ she paid $$500$ to aqualified home energy auditor for a home energy audit. She receiveda written report that identifies significant energy efficientimprovements she can make to her home.

Beth paid estimated taxes of $$1,000.$

Part $1$Tax Computation

Compute Beth Jordan$$s $2023$ Federal income tax payable $($or refunddue$),$ and complete her $2023$ tax return using appropriate forms andschedules. Suggested software: ProConnect Tax.

Part $2$Tax Planning

$12-44$

Beth is anticipating significant changes in her life in $2024,$ and shehas asked you to estimate her taxable income and tax liability for$2024.$

Beth just received word that she has been qualified to adopt a two$-$year$-$old daughter. Beth expects that the adoption will be finalized in$2024$ and that she will incur approximately $$2,000$ of adoptionexpenses. In addition, she expects to incur approximately $$3,500$ ofchild and dependent care expenses relating to the care of her newdaughter, which will enable her to keep her job at MesaManufacturing Company. However, with the additional demands onher time because of her daughter, she has decided to discontinue hertwo part$-$time jobs $($i$.$e$.,$ the part$-$time tax practice and her softwarebusiness$),$ and she will cease making estimated income tax payments.

In your computations, assume that all other $2024$ income andexpenses will be the same as $2023$ amounts