Joe Smith, age 50, is widowed and his social security number is 123-45-6789. His wife, Susan, died in 2020. He lives at 123 Main Drive., New York, NY 55555. Joe does not want to contribute to the Presidential Election Campaign Fund.

The following individuals live with Joe and he provides more than half of their support:

	Social Security Number	Birth Date
George Smith (Joe’s son)	123-45-6787	1/1/2009

During 2021, Joe earned wages from his job: $90,000

Joe did not have enough deductions in 2021 to itemize.

Joe had the following other transactions during the year:

Sold his home on March 14, 2021. He had owned and lived in the home for 10 years. He originally paid $210,000 for the house on April 4, 2011. He sold it for $350,000 and paid realtor commissions of $20,000.

Sold Blue, Inc. stock for $45,000 on March 12, 2021. Joe originally purchased the stock on September 5, 2017, for $50,000.

Received an inheritance of $300,000 from his Uncle Jim. He used $200,000 to purchase Green, Inc. stock on May 15, 2021, and invested $100,000 in Gold, Inc. stock on May 30, 2021.

Received Orange, Inc. stock worth $9,500 as a gift from Aunt Carla on June 17, 2021. Carla’s adjusted basis for the stock was $5,000. No gift taxes were paid on the transfer. Aunt Carla had purchased the stock on April 1, 2014. Joe sold the stock on July 1, 2021 for $22,000.

On July 15, 2021, Joe sold one-half of the Green, Inc. stock for $40,000.

On August 1, 2021, Joe was notified that the Yellow, Inc. stock that he purchased on September 11, 2020 for $52,500 had become worthless.

Complete Joe’s 2021 Federal income tax return and necessary schedules. For purposes of this return, ignore the impact of the child tax credit.

Answer rating: 100% (QA)

Form 1040 Social Security Number 123456789 Name Joe Smith Address 123 Main Drive New York NY 55555 Filing Status Single Exemptions 2 Joe and George Wa... View the full answer