Required Information

Comprehensive Problem $07\backslash (\backslash$cdot $\backslash )63($LO $07-1,$ LO $07-2,$ LO $07\backslash (\backslash$cdot $\backslash )3,$ LO $07-4)($Algo$)$

$[$The following information applies to the questions displayed below.$]$

During $2024,$ your clients, Mr$.$ and Mrs$.$ Howell, owned the following investment assets:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downturn in the stock market, Mr$.$ and Mrs$.$ Howell decided to sell most of their stocks and the mutual fund in $2024$ and to reinvest in municipal bonds. The following investment assets were sold in $2024$:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

The Howells' broker issued them a Form $1099-$B showing the sales proceeds net of the commissions paid. For example. the IBM sales proceeds were reported as $\backslash (\backslash$$ $13,700\backslash )$ on the Form $1099-$B they received.

In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning $2024$:

$-$ The Howells received a consolidated Form $1099$ from the Vanguard mutual fund reporting a $\backslash (\backslash$$ $900\backslash )$ long$-$term capital gain distribution. This dividend was reinvested in $31$ additional Vanguard mutual fund shares on $6/30/2024.$

$-$ In $2018.$ Mrs$.$ Howell loaned $\backslash (\backslash$$ $6,100\backslash )$ to a friend who was starting a new multilevel marketing company called LD$3.$ The friend declared bankruptcy in $2024,$ and Mrs$.$ Howell has been notified she will not be receiving any repayment of the Ioan.

$-$ The Howells have a $\backslash (\backslash$$ $2,400\backslash )$ short$-$term capital loss carryover and a $\backslash (\backslash$$ $4,900\backslash )$ long$-$term capital loss carryover from prior years.

$-$ The Howells did not instruct their broker to sell any particular lot of IBM stock.

$-$ The Howells earned $\backslash (\backslash$$ $3,050\backslash )$ in municipal bond interest, $\backslash (\backslash$$ $3,050\backslash )$ in interest from corporate bonds, and $\backslash (\backslash$$ $4,100\backslash )$ in qualified dividends.

$-$ Assume the Howells have $\backslash (\backslash$$ $132,500\backslash )$ of wage income during the year. a$.$ Use Form $8949$ and page $1$ of Schedule D to compute net long$-$term and short$-$term capital gains. Then, compute the Howells' tax liability for the year $($ignoring the alternative minimum tax and any phase$-$out provisions$)$ assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $\backslash (\backslash$$ $30,000\backslash ).$ Assume that asset bases are reported to the IRS. $($Use the tax rate schedules, Dividends and Capital Gains Tax Rates.$)$

Mr$.$ Howell social security number: $412-34-5670$

Note: Negatlve amounts should be Indleated by a minus sign. Use $2024$ tax rules regardless of year on tax form.

Complete this question by entering your answers in the tabs below.

Form $8949$ PG$1$

Form $8949$ PG$2$

Form $8949$ Page $1$ and $2.$

Form $8949$

Department of the Treasury $-$ Internal

Revenue Service

Sales and Other Dispositions of Capital Assets

Go to wwwirs.gov$/$Form$8949$ for instructions and the latest information.

File with your Schedule D to list your transactions for lines $1$b$,2,3,8$b$,9,$ and $10$ of Schedule D$.$

Before you check Box A$,$ B$,$ or C below, see whether you received any Form$($s$)1009-$B or substitute statement$($s$)$ from your broker, A substitute

statement will have the same information as Form $1090-$B$.$ Either wW show whether your bas$/$s $($usually your cost$)$ was reported to the IRS by your broker and may even teil you which box to check.

You must check Box A$,$ B$,$ or C below. Check only one box.

If more than one box applies for your short$-$term transactions, complete a separate Form $8949,$ page $1,$

for each applicable box. If you have more short$-$term transactions than will fit on this page for one or more of the boxes, cormplete as many forms with the same box checked as you need.

$($A$)$ Short$-$term transactions reported on Form$($s$)1099-$B showing basis was reported to the IRS $($see Note above$)$

$($B$)$ Short$-$term transactions reported on Form$($s$)1099-$B showing basis wasn't reported to the IRS

$($C$)$ Short$-$berm transactions not reported to you on Form $1099-$B Complete this question by entering your answers in the tabs below.

Form $8949$ PG$1$

Form $8949$ PG$2$

Schedule D

Required $\backslash ($ A $\backslash )$

Form $8949$ Page $1$ and $2.$

Form $8949(2022)$

Attachment sequence No$.12$A

Page $2$

Name$($s$)$ shown on return. Name and SSN or taxpayer identification no$.$ not required if shown on other side.

Mr$.$ and Mrs$.$ Howell

Social security number or taxpayer identification number

$\backslash (412-34-5670\backslash )$

Before you check Box D$,$ E$,$ or F below, see whether you recelved any Form$($s$)1009-$B or substitute statement$($s$)$ from your broker. $\backslash ($ A $\backslash )$ substitute

statement will have the same information as Form $1000-$B$.$ Ether wil show whether your bas$/$s $($usually your cost$)$ was reported to the IRS by your broker and may even tell you which box to check.

Part II Long$-$Term. Transactions involving capital assets you held more than $1$ year are generally long$-$term $($see instructions$).$ For short$-$term transactions, see page $1.$

Note:

You may aggregate al long$-$term transactions reported on Form$($s$)1099-$B showing basis was reported to the IRS and for instructions$).$

You must check Box D$,$ E$,$ or F below. Check only one box. If more than o Form $8949$ Schedule D$.$ a$.$ Use Form $8949$ and page $1$ of Schedule D to compute net long$-$term and short$-$term capital gains. Then, compute the Howells' tax liability for the year $($ignoring the alternative minimum tax and any phase$-$out provisions$)$ assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $\backslash (\backslash$$ $30,000\backslash ).$ Assume that asset bases are reported to the IRS. $($Use the tax rate schedules, Dividends and Capital Gains Tax Rates.$)$

Mr$.$ Howell social security number: $412-34-5670$

Note: Negative amounts should be Indleated by a minus sign. Use $2024$ tax rules regardless of year on tax form.

Complete this question by entering your answers in the tabs below.

Form $8949$

PG$1$

Form $8949$

PG$2$

Schedule D

Compute the Howells' tax liability for the year.

Howells' tax liability for the year