Joseph and Diane Smith 1580 West Street Chatham, VA 24531 Joseph and Diane are both 35...

 

 
 

Transcribed Image Text:

Joseph and Diane Smith 1580 West Street Chatham, VA 24531 Joseph and Diane are both 35 and have no dependents. If your clients receive a refund, they want the full amount refunded to them. Diane is currently pregnant and will give birth during the next tax year. Joseph SSN: 400-20-0100 Diane SSN: 200-40-8000 Joseph works as a salesman. During the current year, Joseph earned a total compensation from his job of $125,000. Following are the deductions from his pay. $20,000 Federal Withholding FICA (Social Security) $ 7,347 Withholding Medicare Virginia Withholding $ 1,813 FICA (Social Security) Withholding $ 2,815 Medicare Virginia Withholding $ 4,000 Diane is a nurse and earned total compensation of $45,400. Following are the deductions from her pay. Federal Withholding $ 5,000 $ 658 $ 2,000 Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Long Term Capital Gain Long Term Capital Loss Short Term Capital Gain Short Term Capital Loss They have no loss carryover from previous years. Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising Supplies Legal Fees Liability Insurance $ 4,900 $(3,200) $ 0 $(7,800) $ 4,400 Doctor bills Real estate taxes Personal property taxes Mortgage Interest $175 $500 The couple have the following additional expenses for the year: Health Insurance (after-tax) $15,600 Charitable contributions - cash 9,000 $750 $600 Charitable contributions - Stock GE stock owed 5 years. Fair Market Value (EMO $ 470 $ 2,200 $ 400 8.000 Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising Supplies Legal Fees Liability Insurance $ 4,400 Doctor bills Real estate taxes The couple have the following additional expenses for the year: Health Insurance (after-tax) 9,000 2,000 $175 Personal property taxes Mortgage Interest $15,600 Charitable contributions - cash Charitable contributions - Stock GE stock owed 5 years: Fair Market Value (FMV) Adjusted basis Tax preparation fees $500 750 $750 $600 $ $ 2,200 470 $ 400 $ 8,000 Note: Ignore any potential qualified business income deduction for the purposes of this project Use the information provided below to complete the Schedule D form. Remember to complete the taxpayer information at the top of the form. Comprehensive Tax Problem Update your 1040 form for this new information. • Complete the taxpayer information section at the top of the form • Enter the appropriate information in Part I and Part II . Check the appropriate boxes in Part III - the tax vers have no foreign interests • Submit your Schedule D Enter the Gain or Loss from Schedule D to Form 1040 Line 6 SCHEDULE D (Form 1040 or 1040-SR) Department of the Treasury Internal Revenue Service Name shown on retum Capital Gains and Losses Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Scheduled for instructions and the latest information. Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Yes No Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? If "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part I Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars. 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b. 1b Totals for all transactions reported on Form(s) 8949 with Box A checked 2 Totals for all transactions reported on Form(s) 8949 with Box B checked. 3 Totals for all transactions reported on Form(s) 8949 with Box C checked See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars. 4 Short-term gain from Form 6252 and short-term gain or (oss) from Forms 4684, 6781, and 8824 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions Sa Totals for all long-term transactions reported on Form 1099-8 for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b 8b Totals for all transactions reported on Form(s) 8949 with Box D checked. Proceeds the price 9 Totals for all transactions reported on Form(s) 8949 with Box E checked 10 Totals for all transactions reported on Form(s) 8949 with Box F checked. Cost for other b OMB No 1545-0074 2019 Acht Sequence No. 12 Your social security number 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long- term capital gains or losses, go to Part Il below. Otherwise, go to Part Ill on the back 7 Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) Proceeds sale price Adjustme s from Form800 Part ne2.com ... 11 Gain from Form 4797, Part I: long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 12 Net long-term gain or (joss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 4 s from for other basi) Form) 8949 Part Ine 2 column 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 5 15 Net long-term capital gain or (loss). Combine lines 8a through 14 in column (h). Then go to Partill on the back For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 1133 6 11 12 13 Gain or Boss) Subtract column ( tom count and combin result with column 14 Dainos) Subtract column tom columnd) and combine the result with column 15 Schedule D Form 1040 or 1040-52019 Schedule D (Form 1040 or 1040-SF0 2019 Part III Summary 16 Combine lines 7 and 15 and enter the result • If line 16 is a gain, enter the amount from line 16 on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14. Then go to line 17 below. 17 18 20 • If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. 21 If line 16 is zero, skip lines 17 through 21 below and enter-0-on Form 1040 or 1040-SR, line 6: or Form 1040-NR, line 14. Then go to line 22. Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. If line 16 is a loss, enter here and on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14, the smaller of: • The loss on line 16; or } • ($3,000), or if married filing separately. ($1,500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040 or 1040-SR, line 3a; or Form 1040-NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. 16 18 21 Page 2 Schedule D (Form 1040 or 1040-SR) 2019 Complete a 1040 Schedule D For this assignment, you will need to download a Schedule D form Based on the following information, prepare a Schedule D form. Assume you have already completed a Form 8949. All transactions have been reported on Form 1099- B to the IRS. For Part I, report your information on line 1b. For Part II, report your information on line 8b. Remember to complete Part Iill, Line 16. Susan Smith 231-23-5678 On July 1, three years ago, Susan bought 500 shares of Gold Stream common stock for $2.500. Susan sold the stock on August 1 of the current year for $5.000 On August 1 of the previous year, Susan bought 500 shares of XYZ Corp for $3.000. She sold the stock on July 31 of the current year for $1.000. On January 4 of the current year, Susan bought 100 share of General Corporation stock for $2.000 The year- end value of the stock is $4.500 Joseph and Diane Smith 1580 West Street Chatham, VA 24531 Joseph and Diane are both 35 and have no dependents. If your clients receive a refund, they want the full amount refunded to them. Diane is currently pregnant and will give birth during the next tax year. Joseph SSN: 400-20-0100 Diane SSN: 200-40-8000 Joseph works as a salesman. During the current year, Joseph earned a total compensation from his job of $125,000. Following are the deductions from his pay. $20,000 Federal Withholding FICA (Social Security) $ 7,347 Withholding Medicare Virginia Withholding $ 1,813 FICA (Social Security) Withholding $ 2,815 Medicare Virginia Withholding $ 4,000 Diane is a nurse and earned total compensation of $45,400. Following are the deductions from her pay. Federal Withholding $ 5,000 $ 658 $ 2,000 Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Long Term Capital Gain Long Term Capital Loss Short Term Capital Gain Short Term Capital Loss They have no loss carryover from previous years. Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising Supplies Legal Fees Liability Insurance $ 4,900 $(3,200) $ 0 $(7,800) $ 4,400 Doctor bills Real estate taxes Personal property taxes Mortgage Interest $175 $500 The couple have the following additional expenses for the year: Health Insurance (after-tax) $15,600 Charitable contributions - cash 9,000 $750 $600 Charitable contributions - Stock GE stock owed 5 years. Fair Market Value (EMO $ 470 $ 2,200 $ 400 8.000 Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising Supplies Legal Fees Liability Insurance $ 4,400 Doctor bills Real estate taxes The couple have the following additional expenses for the year: Health Insurance (after-tax) 9,000 2,000 $175 Personal property taxes Mortgage Interest $15,600 Charitable contributions - cash Charitable contributions - Stock GE stock owed 5 years: Fair Market Value (FMV) Adjusted basis Tax preparation fees $500 750 $750 $600 $ $ 2,200 470 $ 400 $ 8,000 Note: Ignore any potential qualified business income deduction for the purposes of this project Use the information provided below to complete the Schedule D form. Remember to complete the taxpayer information at the top of the form. Comprehensive Tax Problem Update your 1040 form for this new information. • Complete the taxpayer information section at the top of the form • Enter the appropriate information in Part I and Part II . Check the appropriate boxes in Part III - the tax vers have no foreign interests • Submit your Schedule D Enter the Gain or Loss from Schedule D to Form 1040 Line 6 SCHEDULE D (Form 1040 or 1040-SR) Department of the Treasury Internal Revenue Service Name shown on retum Capital Gains and Losses Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Scheduled for instructions and the latest information. Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Yes No Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? If "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part I Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars. 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b. 1b Totals for all transactions reported on Form(s) 8949 with Box A checked 2 Totals for all transactions reported on Form(s) 8949 with Box B checked. 3 Totals for all transactions reported on Form(s) 8949 with Box C checked See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars. 4 Short-term gain from Form 6252 and short-term gain or (oss) from Forms 4684, 6781, and 8824 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions Sa Totals for all long-term transactions reported on Form 1099-8 for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b 8b Totals for all transactions reported on Form(s) 8949 with Box D checked. Proceeds the price 9 Totals for all transactions reported on Form(s) 8949 with Box E checked 10 Totals for all transactions reported on Form(s) 8949 with Box F checked. Cost for other b OMB No 1545-0074 2019 Acht Sequence No. 12 Your social security number 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long- term capital gains or losses, go to Part Il below. Otherwise, go to Part Ill on the back 7 Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) Proceeds sale price Adjustme s from Form800 Part ne2.com ... 11 Gain from Form 4797, Part I: long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 12 Net long-term gain or (joss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 4 s from for other basi) Form) 8949 Part Ine 2 column 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 5 15 Net long-term capital gain or (loss). Combine lines 8a through 14 in column (h). Then go to Partill on the back For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 1133 6 11 12 13 Gain or Boss) Subtract column ( tom count and combin result with column 14 Dainos) Subtract column tom columnd) and combine the result with column 15 Schedule D Form 1040 or 1040-52019 Schedule D (Form 1040 or 1040-SF0 2019 Part III Summary 16 Combine lines 7 and 15 and enter the result • If line 16 is a gain, enter the amount from line 16 on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14. Then go to line 17 below. 17 18 20 • If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. 21 If line 16 is zero, skip lines 17 through 21 below and enter-0-on Form 1040 or 1040-SR, line 6: or Form 1040-NR, line 14. Then go to line 22. Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. If line 16 is a loss, enter here and on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14, the smaller of: • The loss on line 16; or } • ($3,000), or if married filing separately. ($1,500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040 or 1040-SR, line 3a; or Form 1040-NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. 16 18 21 Page 2 Schedule D (Form 1040 or 1040-SR) 2019 Complete a 1040 Schedule D For this assignment, you will need to download a Schedule D form Based on the following information, prepare a Schedule D form. Assume you have already completed a Form 8949. All transactions have been reported on Form 1099- B to the IRS. For Part I, report your information on line 1b. For Part II, report your information on line 8b. Remember to complete Part Iill, Line 16. Susan Smith 231-23-5678 On July 1, three years ago, Susan bought 500 shares of Gold Stream common stock for $2.500. Susan sold the stock on August 1 of the current year for $5.000 On August 1 of the previous year, Susan bought 500 shares of XYZ Corp for $3.000. She sold the stock on July 31 of the current year for $1.000. On January 4 of the current year, Susan bought 100 share of General Corporation stock for $2.000 The year- end value of the stock is $4.500

Answer rating: 100% (QA)

Answer 1040 Filing Status Check only one box Last name Smith Last name Diane Smith Home address numb... View the full answer