Note: This problem is for the 2020 tax year.

Denise Lopez, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434. Denise is a material participant in the business, she is a cash basis taxpayer, and her Social Security number is 123-45-6781. Denise lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Jane's Social Security number is 123-45-6781. Denise wants to designate $3 to the Presidential Election Campaign Fund. She has never owned or used any virtual currency. Denise received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. During 2020, Denise had the following income and expense items:

a.

$100,000 salary from Legal Services, Inc.

b.

$20,000 gross receipts from her typing services business.

c.

$700 interest income from Third National Bank.

d.

$1,000 Christmas bonus from Legal Services, Inc.

e.

$60,000 life insurance proceeds on the death of her sister.

f.

$5,000 check given to her by her wealthy aunt.

g.

$100 won in a bingo game.

h.

Expenses connected with the Typing Services:

Office rent	$7,000
Supplies	4,400
Utilities and telephone	4,680
Wages to part-time typists	5,000
Payroll taxes	500
Equipment rentals	3,000

i.

$9,500 interest expense on a home mortgage (paid to Boca Raton Savings and Loan).

j.

$15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2020. Denise had paid $14,000 for the silverware on July 1, 2010. She was reimbursed $10,000 by her insurance company.

k.

Denise had loaned $2,100 to a friend, Joan Jensen, on June 3, 2016. Joan declared bankruptcy on August 14, 2020, and was unable to repay the loan. Assume that the loan is a bona fide debt.

l.

Legal Services, Inc., withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages.

m.

Alimony of $10,000 received from her former husband, Omar Guzman; divorce was finalized on December 2, 2014, and no changes have been made to the divorce decree since that time.

n.

Interest income of $800 on City of Boca Raton bonds.

o.

Denise made estimated Federal tax payments of $2,000.

p.

Sales taxes from the sales tax table of $953.

q.

Property taxes on her residence of $3,200.

r.

Charitable contribution of $2,500 to her alma mater, Citrus State College.

s.

On November 1, 2020, Denise was involved in an automobile accident. At the time of the accident, her automobile's FMV was $45,000. After the accident, the automobile's FMV was $38,000. Denise acquired the car on May 2, 2019, at a cost of $52,000. Denise's car was covered by insurance, but because the policy had a $5,000 deduction clause, Denise decided not to file a claim for the damage.