Required information Comprehensive Problem 5-75 {LO 5-1, LO 5-2, LO 5-3] (Static) {The folio wing infomati'on applies to the questions displayed below} Ken is 53 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired. he is still very active. Ken reported the following nancial information this year. Assume Ken les as a single ta): payer. a. Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal]. b. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis [or investment} in the stock was $31 per share. c. Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years. for $210,000. d. Ken received $13,000 in disability benets for the year. He purchased the disability insurance policy last year. e. Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. f. Ken's son, Mike, instructed his employer to make half of his nal paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100. 9. Ken received a $510 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,250 in itemized deductions last year [the standard deduction for a single ler was $12,200). h. Ken received $30,000 of interest from corporate bonds and money market accounts. Comprehensive Problem 5-75 Part 2 (Static) Complete page 1 of Form 1040, Line 1-7b and Form 1040, Schedule 1. Lines 1-9 for Ken- Department of the Treasury-Internal Revenue Form 1040 Service (99) 2019 OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. U.S. Individual Income Tax Return : Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) [Qualifying widow(er) (QW) Check only If you checked the MFS box, enter the name of spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is one box. a child but not your dependent. Your first name and middle initial Last name Your social security number (Enter as xxx-xx-xxxx) Ken If joint return, spouse's first name and middle initial Last name Spouse's social security number (Enter as xxx-xx- XXXX) : Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). your tax or refund. You Spouse : Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and . here O : Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were born before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name (Enter as xxx-xx-xxxx) Child tax credit Credit for other dependentsstandard Required information Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): 1) First name Last name (Enter as xxx-xx-xxxx) Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b Taxable interest. Attach Sch. B if 2a Tax-exempt interest 23 2b required 3a Qualified dividends 3a b Ordinary dividends. Attach Sch. B if required 4a IRA distributions 4a b Taxable amount 4b Standard : Deduction for- . c Pensions and annuities Ac d Taxable amount Ad : Single or Married : filing separately, 5a Social security benefits 5a b Taxable amount : $12,200 . Married filing : jointly or 6 Capital gain or (loss). Attach Schedule D if required. If not required, check here Qualifying 7a Other income from Schedule 1, line 9 7a : widow(er). $24,400 b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income 7b . Head of : household, : $18,350 Ba Adjustments to income from Schedule 1, line 22 . If you checked 8b : any box under b Subtract line 8a from line 7b. This is your adjusted gross income : Standard : Deduction, see 9 Standard deduction or itemized deductions (from Schedule A) : instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 11a Add lines 9 and 10 11a b Taxable income. Subtract line 11a from line 8b 11b For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2019) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THANSCHEDULE 1 OMB No. 1545-0074 (Form 1040 or 1040-SR) Additional Income and Adjustments to Income 2019 Department of the Treasury Attach to Form 1040 or 1040-SR. Attachment Sequence No. 01 Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Name(s) shown on Form 1040 or 1040-SR Your social security number (Enter as XXX-Xx-xxxx Part I Additional Income Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F 6 Unemployment compensation 00 Other income. List type and amount Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 0 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid 18a b Recipient's SSN C Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line Ba 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. @ 2020 McGraw-Hill Education