Question: Comprehensive Problem 5-2B John Fuji (birthdate June 6, 1979) moved from California to Washington in December 2016. His earnings and income tax withholding for 2017

Comprehensive Problem 5-2B

John Fuji (birthdate June 6, 1979) moved from California to Washington in December 2016. His earnings and income tax withholding for 2017 for his job as a manager at a Washington apple-processing plant are reported on his W-2 form.

John's other income includes interest on a Certificate of Deposit reported on a Form 1099-INT.

Also, he paid $615 per month alimony to his ex-wife (Dora Fuji, Social Security number 573-79-6075).

John received a Form 1098 that reports his mortgage interest and property taxes.

During 2017, John paid the following amounts (all of which can be substantiated):

Auto loan interest 1,575
Credit card interest 655
State sales tax 1,285
Unreimbursed hospital bills 5,250
Doctor bills 2,550
Other deductible medical expenses 760
Income tax preparation fee 500
Job-hunting expenses 925
Cash charitable donation to the Jonagold Research Center 400

In July 2017, someone broke into John's house and stole a coin collection. The collection had a fair market value of $10,800 and a tax basis to John of $5,545. The collection was uninsured.

Required: Complete John's Form 1040, Schedule A and Form 4684.

Make realistic assumptions about any missing data.

Enter all amounts as positive numbers.

If an amount box does not require an entry or the answer is zero, enter "0".

If required round any dollar amount to the nearest dollar.

His earnings and income tax withholding for 2017 for his job as a manager at a Washington apple-processing plant are:

a Employee's social security number

571-78-5974

OMB No. 1545-0008 Safe, accurate, FAST! Use IRS e ~ file Visit the IRS website at www.irs.gov/efile
b Employer identification number (EIN) 34-7654321 1 Wages, tips, other compensation 76,600.00 2 Federal income tax withheld 9,785.00
c Employer's name, address, and ZIP code Granny Smith Apple Co. 200 Ahtanum Rd. Yakima, WA 98903 3 Social security wages 76,600.00 4 Social security tax withheld 4,749.20
5 Medicare wages and tips 76,600.00 6 Medicare tax withheld 1,110.70
7 Social security tips 8 Allocated tips
d Control number 9 Verification code 10 Dependent care benefits
e Employee's first name and initial Last name Suff. 11 Nonqualified plans 12a See instructions for box 12
C o d e
John Fuji 468 Bonnie Doon Ave. Yakima, WA 98902 13
Statutory employee Retirement plan Third-party sick pay
12b
C o d e
14 Other 12c
C o d e
12d
C o d e
f Employee's address and ZIP code
15 State Employer's state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name
WA
Form W-2 Wage and Tax Statement 2017 Department of the TreasuryInternal Revenue Service

Copy BTo Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service.

John's other income includes interest on a Certificate of Deposit reported on a Form 1099-INT:

CORRECTED (if checked)
PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. Braeburn National Bank 1600 W. Nob Hill Blvd. Yakima, WA 98902 Payer's RTN (optional) OMB No. 1545-0112 2017 Form 1099-INT Interest Income
1 Interest Income
$ 1,295.00
2 Early withdrawal penalty Copy B For Recipient This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.
$
PAYER'S federal identification number RECIPIENT'S identification number 3 Interest on U.S. Savings Bonds and Treas. obligations
54-9019016 571-78-974 $
RECIPIENT'S name John Fuji Street address (including apt. no.) 468 Bonnie Doon Ave City or town, state or province, country, and ZIP or foreign postal code Yakima, WA 98902 4 Federal income tax withheld 5 Investment expenses
$ 0.00 $
6 Foreign tax paid 7 Foreign country or U.S. possession
$
8 Tax-exempt interest 9 Specified private activity bond interest
$ $
10 $ Market discount 11 $ Bond premium
FATCA filing requirement 12 Bond premium on Treasury obligations 13 Bond premium on tax-exempt bond
$ $
Account number (see instructions) 14 Tax-exempt and tax credit bond CUSIP no. 15 State 16 State identification no. 17 State tax withheld
$
$

Form 1099-INT

John received the following Form 1098 that reports his mortgage interest and property taxes.

CORRECTED (if checked)
RECIPIENT'S/LENDER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no.

Braeburn National Bank 1600 W. Nob Hill Blvd. Yakima, WA 98902

*Caution: The amount shown may not be fully deductible by you. Limits based on the loan amount and the cost and value of the secured property may apply. Also, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person. OMB No. 1545-0901 2017 (Rev. July 2017) Form 1098 Mortgage Interest Statement
1 Mortgage interest received from payer(s)/borrower(s)* $ 7,780.00 Copy B For Payer/Borrower The information in boxes 1 through 9 is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points, reported in boxes 1 and 6; or because you didn't report the refund of interest (box 4); or because you claimed a non-deductible item.
RECIPIENT'S/LENDER'S federal identification number

54-9019016

PAYER'S/BORROWER'S taxpayer identification no.

571-78-5974

2 Outstanding mortgage principal as of 1/1/2017 $254,678.00 3 Mortgage origination date 12/1/2016
4 Refund of overpaid interest $ 5 Mortgage insurance premiums $
PAYER'S/BORROWER'S name

John Fuji

6 Points paid on purchase of principal residence $
Street address (including apt. no.)

468 Bonnie Doon Ave.

7 Is address of property securing mortgage same as PAYER'S/BORROWER'S address?
If "Yes," box is checked
If "No," see box 8 or 9, below
City or town, state or province, country, and ZIP or foreign postal code

Yakima, WA 98902

10 Number of mortgaged properties 1 11 Other Prop taxes $2,083 8 Address of property securing mortgage
Account number (see instructions) 9 If property securing mortgage has no address, below is the description of the property
Form 1098 (keep for your records) www.irs.gov/form1098 Department of the Treasury - Internal Revenue Service

(keep for your records)

www.irs.gov/form1099int

Department of the Treasury - Internal Revenue Service

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