this is the entire question. please help.

sorry about the previous inconvience.

LLM 2 Samantha A. Cranston, age 37, is single and lives with her dependent mother at 426 SG Grouse Avenue, Allentown, PA 18105. Her Social Security number is 111-21-1113 1. Samantha is a licensed hairstylist. She owns and operates a salon called Turning Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (i.e., stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eaned $44,000 (including tips of $8,000) for the styling services she provided to her own clients Turning Heads is the lotal distributor for several beauty products (e.g., con- ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces G.e., wigs, toupees). The shop made the following sales during 2018 Hairpieces and wigs Beauty products $69,000 48,000 2. Although Samantha operates her business using the cash method of account- ing. she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market) is summarized as follows: Beauty products 48,000 2. Although Samantha operates her business using the cash method of account- ing, she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market) is summarized as follows: 22100 3OLO00 12/31/17 12/31/18 Hairpieces and wigs Beauty products $10,700 $12,600 78700 (22S00) SCapoo 11,400 9,900 COGS 22100 22500 Samantha's purchases for 2018 were $30,500 of hairpieces and wigs and $26,100 of beauty products. Turning Heads had the following operating expenses for 2018: Utilities (i.e., gas, electric, telephorne) $12,900 Ad valorem property taxes: On realty (e.g. shop building and land) On personalty (e.g, equipment, inventory) Styling supplies (e.g, rinses, dyes, gels, hair spray) Fire and casualty insurance Liability insurance Accounting services Janitorial services Sewer service, garbage pickup f2 dec $4,200 1,800 6,000 5,700 4,100 4,000 3,800 2,400 2,300 Water 2,200 Occupation licenses (city and state) Waiting room supplies (e.g. magazines, coffee) 1,500 1,300 Occupation licenses (city and state) Waiting room supplies (e.g, magazines, coffee) 1,500 1,300 3. In early 2018, Samantha decided to renovate the waiting room. On May 10, she spent $10,400 for new chairs, a sofa, various lamps, coffee bar, etc. Samantha follows a policy of claiming as much depreciation as soon as possible. The old furnishings were thrown away or given to customers. For tax purposes, the old furnishings had a zero basis. 4. Turning Heads is located in a building Samantha had constructed at 480 Laurel Street in March 2004. The shop was built for a cost of $300,000 on a lot she purchased earlier for $35,000. Except for a down payment from savings, the cost was financed by a 20-year mortgage. For tax purposes, MACRS depreciation is claimed on the building. During 2018, the following expenses were attributable to the property: Repainting (both exterior and interior) Repairs (plumbing and electrical) $8.000 relctte tobuil Ceduc. expe n In May (after her accident settlement discussed in item 10 below), Samantha paid the outstanding principal on the business mortgage. To do so, she incurred a aud. prepayment penalty of $4,400. Prior to paying off the mortgage, she paid regular 1,900 exp est interest on the mortgage in 2018 of $6,000 ScnA quustian urchasel mprove house release in April 2018 and received he $200,000 Selllement lale that sume 11. In January 2018, Samantha was contacted by the state of Pennsylvania regarding a tract of land she owned in York County. The state intended to convert the property into a district headquarters, barracks, and training center for its highway patrol. Samantha had inherited the property from her father when he died on August 11, 2017. The property had a value of $140,000 on that date and had been purchased by her father on March 3, 1980, for $30,000. On July 25, 2018, after considerable discussions including the state's threat to initiate condemnation proceedings, she sold the tract to the state for $158,000. This transaction was not reported on a Form 1099-B. Since Samantha is not comfortable with real estate investments, she does not plan to reinvest any of the proceeds in another piece of realty. 12. When her father died, Samantha did not know that he had an insurance policy on his life (maturity value of $50,000) in which she was named the beneficiary When her mother told her about the policy in July 2018, Samantha filed a claim with the carrier, Falcon Life Insurance Company. In November 2018, she received a check from Falcon for $51,500 which included $1,500 interest. 13. Upon the advice of a client who is a respected broker, Samantha purchased 1,000 shares of common stock in Grosbeak Exploration for $40,000 on March 4. 2018 In the months following her purchase, the share value of Grosbeak plummeted. Disgusted with the unexpected erosion in the value of her investment, Samantha sold the stock for $28,000 on December 23, 2018. This transaction was reported on Form 1099-B with Samantha's basis correctly reported to the IRS While on her way to work in 2017, Samantha was rear-ended by a hit-and-run driver. Thankfully, she was not injured in the accident. The damage to her Lexus was covered by her insurance company, General Casualty, except for the $1,000 deductible she was required to pay. In 2018, the insurance company located the driver who caused the accident and was reimbursed by his insurer. Consequently Samantha received a $1,000 refund check from General Casualty in May 2018 to reimburse her $1,000 deductilble. 14. 15. After her father's death, Samantha's mother (Mildred Cranston, Social Security num- ber 123-54-3789) moved in with her. Mildred's persistent back trouble made it dif- ficult for her to climb the stairs to the second-floor bedrooms in Samantha's house. So, Samantha had an elevator installed in her personal residence at a cost of $12,000 in January 2018. A qualified appraiser determined that the elevator increased the value of the personal residence by $5,000. The appraisal cost $400. The operation of the elevator during 2018 increased Samantha's electric bill b$300 neteduct 16 med dec dcesnctin teduct Ex ofloor FmV 309oc ele spo As a favor to a long-time client who is a drama prof Samantha spent a weekend as a stylist for the principal actresses in the annual Theater Department fund-raising event. The drama professor provided all of the Cnlo resources that Samantha needed to provide her services. Samantha estimates that neuer Ot Co she would have charged $800 for the services she donated to this charitable event. at a local state university, cheeluct f In addition to the items already noted, Samantha had the following receipts dur hccleduct. 17. ing 2018 Interest income- $900 CD at Scranton First National Bank City of Lancaster general purpose bonds Money market account at Allentown State Bank Qualified dividends on stock investments-- 990 340 $1,730 General Electric $470 380 850 AT&T common Federal income tax refund for tax year 2017 Pennsylvania state income tax refund for tax year 2017 791 205 Se woul FEIe eharged $SO0 for the services she donated to this charitable event. Cleeluctf In addition to the items already noted, Samantha had the following receipts dur hocteduCt ing 2018 17. Interest income- CD at Scranton First National Bank $900 City of Lancaster general purpose bonds Money market account at Allentown State Bank Qualified dividends on stock investments 390 340 $1,730 General Electric $470 AT&T common 380 850 Federal income tax refund for tax year 2017 Pennsylvania state income tax refund for tax year 2017 In addition to the items already noted, Samantha had the following expenditures for 2018: 791 205 18. Contribution to pension plan $10,000 Cuoaueline Medical- Premiums on medical insurance arcue lne Dental bills below line A.S. Property taxes on personal residence Interest on home mortgage Cash donations to qualified charities Professional expenses Subscriptions to trade journals Dues to beautician groups $4,800 1400 6,200 5,500 3.200 4,500 $ 180 140 320 The $10,000 contribution to the pension plan is to a 401(k) type of plan she established in 2018. Previously, she had contributed to an H.R.10 (Keogh) plan but found that the 401 (k) retirement arrangement provides more flexibility and is less complex. The medical insurance policy covers Samantha and her depen- dent mom and was issued in the name of the business (i.e., Tuning Heads). It does not cover dental work or capital modifications to a residence (see item 15 above). 19. During 2018, Samantha made total estimated tax payments with respect to her 2018 tax returms as follows: 19. During 2018, Samantha made total estimated tax payments with respect to her 2018 tax returns as follows: Federal estimated income tax payments Pennsylvania estimated income tax payments Allentown City estimated income tax payments $16,000 4,800 800 Requirements Prepare a 2018 Federal income tax return with appropriate supporting forms and sched- ules for Samantha. In doing this, follow these guidelines: Make necessary assumptions for information not given but needed to complete the return Samantha is preparing her own return. Samantha has the necessary written substantiation (e.g., records, receipts) to sup- port the transactions reported in her tax return. Samantha has itemized deductions ever since she became a homeowner many years ago. The sales tax option was not chosen in 2017, and Samantha had no major purchases that qualify for the sales tax deduction in 2018. If Samantha has an overpayment of tax, she wants it refunded to her Samantha does not wish to contribute to the Presidential Election Campaign Fund. LLM 2 Samantha A. Cranston, age 37, is single and lives with her dependent mother at 426 SG Grouse Avenue, Allentown, PA 18105. Her Social Security number is 111-21-1113 1. Samantha is a licensed hairstylist. She owns and operates a salon called Turning Heads, located at 480 Laurel Street, Allentown, PA 18105. Samantha's business activity code is 812112. In addition to 10 work stations (i.e., stylist chairs) and a small reception area, the shop has display and storage areas for the products she sells (see item 2 below). During the year, Samantha leased nine of the stations to other hairstylists who are considered self-employed. The IRS sanctioned the self employment classification for the stylists in an audit of one of Samantha's prior tax returns. Samantha collected $68,000 in rents from the stylists who leased the work stations. From her own station, Samantha eaned $44,000 (including tips of $8,000) for the styling services she provided to her own clients Turning Heads is the lotal distributor for several beauty products (e.g., con- ditioners, shampoos) that cannot be purchased anywhere else. Samantha buys these items from the manufacturers and sells them to regular patrons, walk-in customers, and other beauticians (including those who lease chairs from her). Turning Heads is also known for the selection and quality of its hairpieces G.e., wigs, toupees). The shop made the following sales during 2018 Hairpieces and wigs Beauty products $69,000 48,000 2. Although Samantha operates her business using the cash method of account- ing. she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market) is summarized as follows: Beauty products 48,000 2. Although Samantha operates her business using the cash method of account- ing, she maintains inventory accounts for the items she sells. Relevant informa- tion about the inventories (based on lower of cost or market) is summarized as follows: 22100 3OLO00 12/31/17 12/31/18 Hairpieces and wigs Beauty products $10,700 $12,600 78700 (22S00) SCapoo 11,400 9,900 COGS 22100 22500 Samantha's purchases for 2018 were $30,500 of hairpieces and wigs and $26,100 of beauty products. Turning Heads had the following operating expenses for 2018: Utilities (i.e., gas, electric, telephorne) $12,900 Ad valorem property taxes: On realty (e.g. shop building and land) On personalty (e.g, equipment, inventory) Styling supplies (e.g, rinses, dyes, gels, hair spray) Fire and casualty insurance Liability insurance Accounting services Janitorial services Sewer service, garbage pickup f2 dec $4,200 1,800 6,000 5,700 4,100 4,000 3,800 2,400 2,300 Water 2,200 Occupation licenses (city and state) Waiting room supplies (e.g. magazines, coffee) 1,500 1,300 Occupation licenses (city and state) Waiting room supplies (e.g, magazines, coffee) 1,500 1,300 3. In early 2018, Samantha decided to renovate the waiting room. On May 10, she spent $10,400 for new chairs, a sofa, various lamps, coffee bar, etc. Samantha follows a policy of claiming as much depreciation as soon as possible. The old furnishings were thrown away or given to customers. For tax purposes, the old furnishings had a zero basis. 4. Turning Heads is located in a building Samantha had constructed at 480 Laurel Street in March 2004. The shop was built for a cost of $300,000 on a lot she purchased earlier for $35,000. Except for a down payment from savings, the cost was financed by a 20-year mortgage. For tax purposes, MACRS depreciation is claimed on the building. During 2018, the following expenses were attributable to the property: Repainting (both exterior and interior) Repairs (plumbing and electrical) $8.000 relctte tobuil Ceduc. expe n In May (after her accident settlement discussed in item 10 below), Samantha paid the outstanding principal on the business mortgage. To do so, she incurred a aud. prepayment penalty of $4,400. Prior to paying off the mortgage, she paid regular 1,900 exp est interest on the mortgage in 2018 of $6,000 ScnA quustian urchasel mprove house release in April 2018 and received he $200,000 Selllement lale that sume 11. In January 2018, Samantha was contacted by the state of Pennsylvania regarding a tract of land she owned in York County. The state intended to convert the property into a district headquarters, barracks, and training center for its highway patrol. Samantha had inherited the property from her father when he died on August 11, 2017. The property had a value of $140,000 on that date and had been purchased by her father on March 3, 1980, for $30,000. On July 25, 2018, after considerable discussions including the state's threat to initiate condemnation proceedings, she sold the tract to the state for $158,000. This transaction was not reported on a Form 1099-B. Since Samantha is not comfortable with real estate investments, she does not plan to reinvest any of the proceeds in another piece of realty. 12. When her father died, Samantha did not know that he had an insurance policy on his life (maturity value of $50,000) in which she was named the beneficiary When her mother told her about the policy in July 2018, Samantha filed a claim with the carrier, Falcon Life Insurance Company. In November 2018, she received a check from Falcon for $51,500 which included $1,500 interest. 13. Upon the advice of a client who is a respected broker, Samantha purchased 1,000 shares of common stock in Grosbeak Exploration for $40,000 on March 4. 2018 In the months following her purchase, the share value of Grosbeak plummeted. Disgusted with the unexpected erosion in the value of her investment, Samantha sold the stock for $28,000 on December 23, 2018. This transaction was reported on Form 1099-B with Samantha's basis correctly reported to the IRS While on her way to work in 2017, Samantha was rear-ended by a hit-and-run driver. Thankfully, she was not injured in the accident. The damage to her Lexus was covered by her insurance company, General Casualty, except for the $1,000 deductible she was required to pay. In 2018, the insurance company located the driver who caused the accident and was reimbursed by his insurer. Consequently Samantha received a $1,000 refund check from General Casualty in May 2018 to reimburse her $1,000 deductilble. 14. 15. After her father's death, Samantha's mother (Mildred Cranston, Social Security num- ber 123-54-3789) moved in with her. Mildred's persistent back trouble made it dif- ficult for her to climb the stairs to the second-floor bedrooms in Samantha's house. So, Samantha had an elevator installed in her personal residence at a cost of $12,000 in January 2018. A qualified appraiser determined that the elevator increased the value of the personal residence by $5,000. The appraisal cost $400. The operation of the elevator during 2018 increased Samantha's electric bill b$300 neteduct 16 med dec dcesnctin teduct Ex ofloor FmV 309oc ele spo As a favor to a long-time client who is a drama prof Samantha spent a weekend as a stylist for the principal actresses in the annual Theater Department fund-raising event. The drama professor provided all of the Cnlo resources that Samantha needed to provide her services. Samantha estimates that neuer Ot Co she would have charged $800 for the services she donated to this charitable event. at a local state university, cheeluct f In addition to the items already noted, Samantha had the following receipts dur hccleduct. 17. ing 2018 Interest income- $900 CD at Scranton First National Bank City of Lancaster general purpose bonds Money market account at Allentown State Bank Qualified dividends on stock investments-- 990 340 $1,730 General Electric $470 380 850 AT&T common Federal income tax refund for tax year 2017 Pennsylvania state income tax refund for tax year 2017 791 205 Se woul FEIe eharged $SO0 for the services she donated to this charitable event. Cleeluctf In addition to the items already noted, Samantha had the following receipts dur hocteduCt ing 2018 17. Interest income- CD at Scranton First National Bank $900 City of Lancaster general purpose bonds Money market account at Allentown State Bank Qualified dividends on stock investments 390 340 $1,730 General Electric $470 AT&T common 380 850 Federal income tax refund for tax year 2017 Pennsylvania state income tax refund for tax year 2017 In addition to the items already noted, Samantha had the following expenditures for 2018: 791 205 18. Contribution to pension plan $10,000 Cuoaueline Medical- Premiums on medical insurance arcue lne Dental bills below line A.S. Property taxes on personal residence Interest on home mortgage Cash donations to qualified charities Professional expenses Subscriptions to trade journals Dues to beautician groups $4,800 1400 6,200 5,500 3.200 4,500 $ 180 140 320 The $10,000 contribution to the pension plan is to a 401(k) type of plan she established in 2018. Previously, she had contributed to an H.R.10 (Keogh) plan but found that the 401 (k) retirement arrangement provides more flexibility and is less complex. The medical insurance policy covers Samantha and her depen- dent mom and was issued in the name of the business (i.e., Tuning Heads). It does not cover dental work or capital modifications to a residence (see item 15 above). 19. During 2018, Samantha made total estimated tax payments with respect to her 2018 tax returms as follows: 19. During 2018, Samantha made total estimated tax payments with respect to her 2018 tax returns as follows: Federal estimated income tax payments Pennsylvania estimated income tax payments Allentown City estimated income tax payments $16,000 4,800 800 Requirements Prepare a 2018 Federal income tax return with appropriate supporting forms and sched- ules for Samantha. In doing this, follow these guidelines: Make necessary assumptions for information not given but needed to complete the return Samantha is preparing her own return. Samantha has the necessary written substantiation (e.g., records, receipts) to sup- port the transactions reported in her tax return. Samantha has itemized deductions ever since she became a homeowner many years ago. The sales tax option was not chosen in 2017, and Samantha had no major purchases that qualify for the sales tax deduction in 2018. If Samantha has an overpayment of tax, she wants it refunded to her Samantha does not wish to contribute to the Presidential Election Campaign Fund