Spencer Duck (SSN 000-22-1111) is single and his eight-year-old son, Mitch, lives with
him nine months of the year in a rented condominium at 321 Hickory Drive in Ames,
Iowa. Mitch lives with his mother, Spencer's ex-wife, during the summer months. His
mother provides more than half of Mitch's support and Spencer has agreed to allow her to
claim Mitch as her dependent. Spencer has a salary of $39,000 and itemized deductions of
$4,000 (none of the itemized deductions were charitable contributions). Taxes withheld
during the year amount to $3,221. Spencer received a K-1 from a partnership indicating
that his share of the partnership STCL is $200. On July 14 of the current year, he sold the
following assets:
• Land was sold for $35,000. The land was received as a property settlement on January
10, 2010, when the land's FMV amounted to $30,000. His ex-wife's basis for the land,
purchased on January 10, 2002, was $18,600.
• A personal-use computer acquired on March 2 last year for $4,000 was sold for
$2,480.
• A membership card for a prestigious country club was sold for $8,500. The card was
acquired on October 10, 2004, for $6,000.
• Marketable securities held as an investment were sold for $20,000. The securities were
inherited from his uncle, who died on March 10 of the current year when FMV of
the securities was $21,000. The uncle purchased the securities on May 10, 1990, for
$10,700.
In addition to the above sales, Spencer received a $100 refund of state income taxes paid
last year. Spencer used the standard deduction last year to compute his tax liability. He
had no transactions involving virtual currency. All of the appropriate 1099 forms were
received, but the brokerage company did not provide the basis information. Prepare Form
1040 and Schedule D for the current year.