Question: Need help preparing a tax return for this scenario John Rivera, age 31, is single and has no dependents. At the beginning of John started
Need help preparing a tax return for this scenario
John Rivera, age 31, is single and has no dependents. At the beginning of John started his own excavation business and named it Earth Movers. John liv 1045 Center Street, Lindon, UT, and his business is located at 381 State Street don, UT. The Zip Code for both addresses is 84042. John's Social Security nu is 111-11-1111, and the business identification number is 11-1111111. John is a basis taxpayer. During 2021, John reports the following items in connection his business. Fee income for services rendered $912,000 Building rental expense 36,000 Office furniture and equipment rental expense 9,000 Office supplies 2,500 Utilities 4,000 Salary for secretary 34,000 Salary for equipment operators 42,000 Payroll taxes 7,000 Fuel and oil for the equipment 21,000 Purchase of three new front-end loaders on January 15, 2021 560,000 Purchase of a new dump truck on January 18, 2021 80,000 During 2021, John recorded the following additional items. Interest income from First National Bank $10,000 Dividends from ExxonMobil 9,500 Quarterly estimated tax payments 11,500 John wants to maximize his cost recovery deductions (including taking any expense and any available additional first-year depreciation). On October 8, 2021, John inherited IBM stock from his Aunt Mildred. Johr been her favorite nephew. According to the data provided by the executor of Mildred's estate, the stock was valued for estate tax purposes at $110,000. Jo considering selling the IBM stock for $125,000 on December 29, 2021, and $75,000 of the proceeds to purchase an Acura ZDX. He would use the car for business. John wants to know what effect these transactions would have a 2021 adjusted gross income
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