Taxation Project: Mr$.$ & Mrs$.$ Lapin $2024$ Tax returnFollowing is a list of information for Michael and Diana Lapin for the tax year $2023.$ Michael and Diana are married and have three children, Amara, Bryan, and Skyla. They live at $120$ Main Street, Flushing NY $11425.$ Michael is a Business Law Professor teaching at BMCC CUNY. Diana works part$-$time for Creation, a genetic research lab. The Lapins' and their dependents information is as follows:NameSocial Security No$.$AgeOther FactsMichael$111-11-111152$Business Law Professor at BMCC $-$ CUNYDiana$222-22-222247$Geneticist. Diana was unemployed for a few months in $2024.$ Amara $($daughter$)333-33-333320$Full$-$time student at Queens College; her gross income is $$28,500.$Bryan $($son$)444-44-444415$High School Senior. Works after school at Burger King. Gross income is $$4,700.$Skyla $($daughter$)666-66-666612$Attends Saint Francis Middle School. Lorraine Kingston $($Dianas mother$)777-77-777775$Retired Nurse over $52\%$ of her support comes from the Lapins. She resides in a nursing home.Edward Lapin $($Michaels Uncle$)888-88-888857$Lives in NJ$,$ receives $50\%$ support from Michael and Diana. Earns $$6,000$ a year from a part$-$time job.Evelyn Benjamin$999-99-999947$Michaels ex$-$wife $($Do not consider as dependent$)$Terrence Kingston$100-00-000018$Bryans cousin lived with the Lapins for the entire year. He is a full$-$time student at BMCC and had no earned income during the year.Dependents: Assume that all other requirements are met by each potential dependent.Michaels Previous Marriage:Michael is obligated to pay Alimony of $$850$ and child support of $$1,000$ monthly to Evelyn based upon their divorce decree dated $11/20/2016.$ All payments were made on time and no previous arrears existed. However, as of December $31,2024,$ he had only paid a total of $$13,800.$ Michael and Evelyn both agreed that the outstanding balance will be paid in January $2025.$ The Lapin W$-2$ information is as follows:MichaelDianaGross wages$95,50042,000$Federal Withholding Taxes$13,6003,800$NYS Withholding Taxes$6,2002,800$NYC Withholding Taxes$3,4501,500$Interest earned by the Lapin are as follows: $2/6$Types:AmountsInterest on $3\mathrm{.}75\%20-$year US Treasury Bonds $2,250$Interest on NYS $4\%$ General Obligation Bonds$2,500$Interest on N$.$J$.3\mathrm{.}75\%$ State Dormitory Bonds$5,000$Interest on CD Chase Bank $1,250$Besides teaching at BMCC$,$ Michael also has his own private consulting practice $($Lapin Legal Consultancy, LLC$,$ EIN: $55-5687541,$ Business code: $541110,$ Accounting method: Cash Basis$),$ located at $195$ Chambers street, New York, NY $10007.$ The income and expenses associated with his practice are as follows:Gross Receipts $$395,000$Rent$125,500$Office Salaries$75,500$Payroll Taxes$15,475$Office Supplies$11,000$Advertisement$9,000$Utilities$8,000$Parking Violation Fines$3,350$Phone$/$Internet$3,000$Accounting Fees$12,000$Health Insurance Plan Employees$15,000$Office Maintenance & Repairs$5,000$Office Equipment $($see Note $1)35,000$Travel $($see Note $2)3,000$Cleaning Supplies $1,500$Estimate Taxes $($see Note $3)15,000$Note $1$ the category office equipment includes printers, computers, fax machines, percolators, phones, microwave, and office refrigerator. The items were placed in service during $2024.$ Michael is unfamiliar with the tax treatment and therefore requires your help. He is greatly concern with the tax benefits available for the costs incurred for office equipment. Hint: should he capitalized and depreciate the equipment cost, or is there another available tax treatment?Note $2$ Michael visited his mother who lives in Miami, where he spent a total of three days. He used his business card to secure a cheaper flight. The $$3,000$ cost includes flight and car rental services. Note $3$ Lapin Legal Consultancy, LLC$,$ paid federal estimate taxes of $$10,000$ and NYS estimate taxes of $$5,000.$ These taxes were paid to avoid penalties for tax underpayment for $2024.$ Hint: Do not include these payments in Schedule C but rather think carefully where on the return they belong.Group Term Life Insurance$3/6$BMCC provides $$120,000$ of group term life insurance for Michael, who is not a key employee. $($Hint: dont forget to consider its effect on gross income chapter $4).$Unemployment Insurance During $2024,$ Diana received unemployment insurance from New York State. She received Form $1099$ G which stated that she had received a total of $$8,250$ and her federal tax withholdings were $$825.$ No state taxes were withheld.Retirement ContributionsDuring $2024,$ Michael contributed $$6,500$ to his Traditional IRA accounts, and Diana contributed $$5,000$ to her Roth IRA account. Michael is currently covered by a retirement plan with Teachers Retirement System $($TRS$)$ at BMCC$.$ NYS Tax Refund Mr$.$ & Mrs$.$ Lapin received a $1099$ for $$2,350$ representing a $2023$ NYS Tax Refund which was received in $2024.$ The Lapins itemized their deductions in $2023.$ Capital Stock Transactions Michael sold the following securities during $2024$: CompanySharesSelling PriceDate soldDate AcquiredTax BasisGain$/$LossLong or Short TermIBM$2,000185,00012/01/2410/15/18190,000$TI$1,00018,00006/12/2402/21/108,000$GE$1,00035,00012/08/2406/15/2050,000$AAPL$1,00085,00011/15/2402/07/2480,000$AMC$50016,50012/20/2409/12/2420,000$Sale of Principal Residence $($see Note $4)$ Date of sale $06/30/2024$ Date Acquired $01/01/2010$ Selling Price $$1,630,000$Adj. Basis $985,000$Other Selling Exp. $45,000$Commission $6\%$ of sale priceNote $4-$ Sale of Residence: Mr$.$ & Mrs$.$ Lapin lived in this house for many years. It was acquired in $2012$ at a cost of $$885,000$ and it was their principal residence. Over the years they made major improvements to their home and all capital improvements are documented. Mr$.$ & Mrs$.$ Lapin wish to avail themselves of the $$500,000$ gain exclusion under IRC Sec $121.$ Dont forget that sale of residence results in capital gains or losses.Expenses incurred during $2024$ to be considered for Schedule A $4/6$Itemized Deductions $-$ Medical Nike Exercise Rowing Machine $($see Note $5)5,000$Doctor visits to MDs$,$ & DDS$,16,000$ Prescription Drugs $8,000$Travelling Expenses $($see Note $6)3,250$Vitamins & Herbs for Mr$.$ & Mrs$.$ Lapin $6,500$ Visits to local Gypsies and Fortune$-$tellers $($Mrs$.$ Lapin$)15,200$ Medical Insurance reimbursements $15,000$ Note $5$ Medical Expense: Michael has weak muscles in his back. His personal physician prescribed a Nike rowing machine to try to alleviate his lower back pain. Note $6$ Mrs$.$ Lapin took a trip to Miami after been diagnosed by her medical doctor with extreme stress and fatigue. She believes that the trip will elevate her condition, and that I did.Taxes PaidNYS & NYC Income Taxes See W$-2$ information Real Estate Taxes $18,000$Personal Property Taxes $8,000$Interest Expense Interest on Home Mortgage $$28,000$Points on home mortgage $6,000$ Mortgage Insurance Premiums $8,500$Interest Paid on Personal Loan $5,250$ Charitable Contributions Church Tithes paid for $2024$ by Mr$.$ & Mrs$.$ Lapin $$20,000$Donations of Property:Paintings & Sculpture: $($see Note $7)-$ Cost $ $12,000-$ FMV $24,600$ Note $7-$ Contribution of Property: A reputable company appraised the painting and sculpture. Michael believes that the estimated Fair Market Value should be $$40,000$ and not $$24,600$ has declared by the appraisal company. Other ExpensesGambling losses $($see Note $8)$ $$22,500$Note $8-$ Gambling Losses: Mrs$.$ Lapin enjoys gambling in Las Vegas and she considers herself to be the Black$-$Jack Doctor. During $2024$ she won $15,500$ and incurred losses of $38,000.$ Her net gambling losses were $22,500.$ After her summer winnings, she has been on a consistent losing streak! Other fact: $5/6$ Amara is pursuing her first degree in Business Administration. She purchased course$-$related books from the campus bookstore for $$1,500.$ Amara does not have a felony drug conviction. Her qualified tuition expenses incurred for $2024$ was $$12,500.$ However, she also was granted a scholarship of $$11,500.$ All expenses were paid by Michael Lapin.$$ Amara received a $1099$ for $$2,400$ of interest issued by Wells Fargo Bank, P$.$O$.$ BOX $3908$ Des Moines IA $503063411,$ EIN $94-1000000.$ The interest earned was from money she had inherited from her grandparents and kept in a Certificate of Deposit at MCU.$$ The Lapins $($Mr$.$ and Mrs$.)$ received a $1099-$DIV from TD Ameritrade with qualified dividends of $$2,650.$ During Dianas unemployment, American Express granted her a debt forgiveness of $$2,500$ during $2024.$ Dianas student loan interest for $2024$ is $$1,250.$ Michael incurred $$500$ in educator expenses during $2024$ from buying teaching material and supplies.$$ Mr$.$ and Mrs$.$ Lapin paid TLC Day Care $$$3,400$ to take care of Skyla for about $2$ hours after school on days that Diana was unavailable. These services were only used during Dianas employment.$$ Diana had loaned her sister, Pam $$5,000$ in $2023$ and was repaid on May $15,2024-$ $$5,350.$ Beware Notice: $$ When examining what to include in your Schedule A$,$ consider all necessary information provided. Not because most of Schedule A items are found together, means that all.$$ Ensure to include all form of gross income, which is in many areas of the project.$$ Read carefully before making any judgment on the situation.$$ Disregard any calculations for Alternative Minimum Tax $($AMT$).$ Instructions:$1.$ List the items and amounts that will be Include in lapins gross income.