Chapter 4 Homework eBook Comprehensive Problem 4-1 Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 528, Las Vegas, NV 89125. Skylar is a stay-at- home parent and Walt is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Neither are age 65 or older. The Blacks provide all the support for Skylar's mother, Rebecca Backin (Social Security number 411- 66-2121), who lives in a nursing home in Reno, NV, and has no income. Walter's father, Alton Black (Social Security number 343-22-8899), lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $7,600 in 2021, the Blacks provide over half of Alton's support. Skylar and Walt claim a $500 other dependent credit each for Rebecca and Alton. Walt's earnings from teaching are included on the W-2 (see separate tab). The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2021. They originally paid $75,000 for the home on July 3, 1996, but managed to sell it for $598,000. They spent $14,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home. The Blacks received a 1099-DIV from their mutual fund investments (see separate tab). The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2021 and used by the Blacks for 16 days. The rental activity does not rise to the level to qualify for the QBI deduction. Pertinent information about the condo rental is as follows: Rental income $25,000 Mortgage interest reported on Form 1098 16,000 Homeowners' association dues 5,200 Utilities 3,400 Maintenance 6.600 Check My Work Previous NextChapter 4 Homework eBook The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2021 and used by the Blacks for 16 days. The rental activity does not rise to the level to qualify for the QBI deduction. Pertinent information about the condo rental is as follows: Rental income $25,000 Mortgage interest reported on Form 1098 16,000 Homeowners' association dues 5,200 Utilities 3,400 Maintenance 6,600 Depreciation (assume fully depreciated) 0 The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo. The Blacks received a $5,600 EIP in 2021. Required: Complete Form 1040 and the schedules and forms provided for the Blacks. Assume the taxpayers had health coverage for the entire year. Neither taxpayers wants to contribute to the presidential election campaign. If an amount box does not require an entry or the answer is zero, enter "0". Do not round any percentages. If required, round your answers to the nearest dollar. If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers. Special instructions for Form 8582: If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts. Check My Work Previous NextChapter 4 Homework eBook ? SCHEDULE E Supplemental Income and Loss OMB No. 1545-0074 (Form 1040) (From rental real estate, royalties, partnerships, S corporations, estates, 2021 trusts, REMICs, etc.) Department of the Treasury Attach to Form 1040, 1040-SR, 1040-NR, or 1041. Attachment Internal Revenue Service (99) Go to www.irs.gov/ScheduleE for instructions and the latest information. Sequence No. 13 Name(s) shown on return Your social security number Walter and Skylar Black 700-01-0002 Part I Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C (see instructions). If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40. A Did you make any payments in 2021 that would require you to file Form(s) 1099? (see instructions) o Yes No B If "Yes," did you or will you file required Forms 1099? 0 Yes O No 1a |Physical address of each property (street, city, state, ZIP code) A 123 Buncombe Lane, Brian Head, UT 84719 P C Type of Property 2 For each rental real estate property Fair Rental Personal Use 1b (from list below) QJV listed above, report the number of fair Days Days A 3 rental and personal use days. Check the A 184 V 16 V QJV box only if you meet the requirements to file as a qualified joint B Check My Work Previous NextChapter 4 Homework eBook 12 Mortgage interest paid to banks, etc. (see instructions) 12 13 Other interest . . . 13 14 Repairs . . . 14 15 Supplies . . 15 Taxes . . 16 17 Utilities . . 17 X 18 Depreciation expense or depletion . . .. 18 19 Other (list) Homeowners' Assoc 19 20 Total expenses. Add lines 5 through 19 . 20 21 Subtract line 20 from line 3 (rents) and/or 4 (royalties). If result is a (loss), see instructions to find out if you must file Form 6198 . . 21 22 Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) . .. 22 C 23a Total of all amounts reported on line 3 for all rental properties 23a 25,000 V b Total of all amounts reported on line 4 for all royalty properties . . . . 23b c Total of all amounts reported on line 12 for all properties . . . . 23c d Total of all amounts reported on line 18 for all properties . . . 23d e Total of all amounts reported on line 20 for all properties . . . 23e Check My Work Previous NextChapter 4 Homework eBook 3 Rents received . . . 3 25,000 V 4 Royalties received Expenses: 5 Advertising . . . 5 6 Auto and travel (see instructions) . . 6 7 Cleaning and maintenance . 6,600 X 8 Commissions . . . 9 Insurance . . 10 Legal and other professional fees . 10 11 Management fees . . 11 12 Mortgage interest paid to banks, etc. (see instructions) 12 16,000 X 13 Other interest . . 13 14 Repairs . . . 14 15 Supplies . . . 15 Taxes . . 16 17 Utilities . . 17 3,400 X 18 Depreciation expense or depletion . . . . . 18 19 Other (list) Homeowners' Assoc 19 52,500 X 20 Total expenses. Add lines 5 through 19 . . . . . . 20 Check My Work Previous Next