Special Project Spring 2021

Note: This problem is for the 2019 tax year.

Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1973, and her Social Security number is 123-45-6785. She did not engage in any virtual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund.

The following information is shown on Beth's Wage and Tax Statement (Form W-2) for 2019.

Line

Description

Amount

1

Wages, tips, other compensation

$65,000.00

2

Federal income tax withheld

9,500.00

3

Social Security wages

65,000.00

4

Social Security tax withheld

4,030.00

5

Medicare wages and tips

65,000.00

6

Medicare tax withheld

942.50

15

State

Arizona

16

State wages, tips, etc.

65,000.00

17

State income tax withheld

1,954.00

During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV.

Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2019. On her 2018 Federal income tax return, she used the standard deduction.

Fees earned from her part-time tax practice in 2019 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2019, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2019, Beth sold the stock for $14 a share.

Beth bought a used sport utility vehicle for $6,000 on June 5, 2019. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2019, she sold the vehicle to a friend for $6,500.

On January 2, 2019, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2019, for $55 a share. Both stock transactions were reported to Beth on Form 1099-B; basis was not reported to the IRS.

During the year, Beth records revenues of $16,000 from the sale of a software program she