The following additional information is available for the Dr. Ivan and Irene Incisor family. The Incisors own a rental beach house in Hawaii. The beach house was rented for the full year during 2012 and was not used by the Incisors during the year. The Incisors were active participants in the management of the rental. Pertinent information about the rental house is as follows:
Address: 1237 Pineapple St., Lihue, HI....................................96766
Net rental income.............................................................$20,350
Mortgage interest...............................................................7,800
Real estate taxes................................................................2,400
Utilities...........................................................................1,825
Maintenance.....................................................................3,000
The house is fully depreciated so there is no depreciation expense.
For the 2012 tax year, on March 15, 2013, Ivan contributes $5,000 to a traditional IRA for himself and $5,000 to a traditional IRA for his wife. He is not covered by a qualified retirement plan at work.
Irene had a retirement plan at the job from which she was laid off on January 2, 2012. The plan had a balance of $24,000. On May 10, 2012, Irene had the entire retirement plan balance rolled directly into an IRA at Timador & Embaucar Brokerage, Inc.
Required: Combine this new information about the Incisor family with the information from Chapters 1-3 and complete a revised 2012 tax return for Ivan and Irene. Be sure to save your data input files since this case will be expanded with more tax information in later chapters.

Transcribed Image Text:

U.S. Individual Income Tax Return OMB No. 1545-0014 RS Us Your secial security number he 5So) above Filing StatusSnge Check only one 3 Mamed Sing eeparately. Enter spouse's SSN above 4 Maried sing jaintly leven if only one had income) ם Houd of household twthquallying person Boeistuloesur equaltyie person a child but nat your depandenit anbar ths Qualyingwidowerl with depedent chid Yourself. If someone can darn you degendert, do not check DO, ived with y more than four dependents, bee nstructions and heck hore d Total number of exenptione claimed 7 Wages, salanes. dps. Attach Forms, w-2 a Taxable intereot. Attach Schecule B if required b Tax-exempt intorest. Do not include on ine Ba Attach Forms) 3a Odinary dividends. Attach Schedule B γ required b Qualifiad dividends 10 Taxable retunds, credta, or offes of state and local income taxss 11 Aimony received 12 Business income or loseAttach Schedle C or C-EZ 13 Capital gain or lossh. Attach Schedule D ifrequired. If not required, check here13 14 Cther goins or fosoeo Atach Form 478T f you did not see instructions. 1a IRA distributions b Taxablo amount b Taxable 16a Pensions and 7 Rantal real estate, royaltes, partnerships, S corporationa, brusts, eto. Attach Schadul E 17 13 Fam income oo Altach Schoduie F not attach, anyUnemployment compansanicn paymant. Albo please use Form 1040-V. 20a Social security benefts 20a 21 Other income, List type and amount 22 Combine the amounts in the tarright colunn for Ines 23 Educator 2 Cartain busines b Taxable amount 21. This is your total Inoome22 Adjusted fee-bests govemment ofticists Anach Form 2100 or 2106-E 25 Haalth savings account deducion. Attach Form 8889 26 Moing expenses. Anach Fom 3903 27Daductible part el sal-employmant a. Atach SchedueSE27 2 Self-employed BEP, SIMPLE, and quaified plans 29 Self-employed heath insurance deduction 3 Penally on early withdawal of savings 31a Almry paid b Recipient's SSN 33 Sludent can interest deduction 34 Tuiton and fees. Attach Form 917 Domeetic production actvbes deduction Altach Form 8903 35 3 Add lines 23 though 35 37 Bubtract ine 36 fom ine 22. Tis is your odjusted For Disclosure, Privacy Act, and Paperwerk Reduction Act Notice, see separate instructions Cat No. 113208 Page 2 na Check[ □ Youwtborn beloe January 2.1947. [] Bind]Totalbaces Bubtract ine 40 Foreign oreditAaGh Fom 116 if squired 0 Education oredita 5‘ STUnported soclal secuity and Meicae tax hom Fom Sef-emptymett tax Attach Sche ble Other Taxes a b payments and EC. 5 Addtional child ta Credit for Third Party Do you want Designee allow another person to disouss this wm with the R3 InsuonesComplete below. No Use Only SCHEDULEE Form 1040 Supplemental Income and Loss From rental real estate, royalties, partnerahips S eorporationa, estates, trusts, REMICs, ete 2011 A Did you mae any paymeris in 2011 that would require you to le Foms 1020iucions) Part1 Income or Loss From Rental Real Estate and Royities Nats. you are in the busint renting paonal property, us Caution For aach noial propertylistod on ina 1,Chock the box in the las okumn only you ownod that property as a membar ora 1Physical address of each property-street, chy, stoe, pe-vo e2Frah ret Yes No Days Use Doys Type of Property 1 Singie Family Resican acationBhot-Tem Fareal 5 Land 2Mab-Family Resicen Commercial Sell-Pantal Properties 3a Merchant card and hrd party paymns For 2011ntr3a 4Total not including amounts on ine 3a that are not Expenses 5 Adverteing Auto and tral (e instructions) Cleaning and maimenance 10 Legal and other professional fees 11 Managemant fee 12 Martgoge Interest pald to banks, el (ee instruction 12 4 Repairs 16 Tcos 18 Depreciaion eperee or clepletion Cther intenest Bupplies UMaties 20 Totalxpeneas. Addns through 19 21 Subtract ine 20 fom ine 4. If rout is a lossl, so0 Instructions to find out you must tle Form 22 Deduot ble rental real estate loes ater im Itation, any n Form 8512 (s instuction 23a Total of all arourts reported on ine 3a for al rar tal properas b Toal of all amoua raportad an3a for al royaity proparea a Total of all amounts reported on ine 4 for all rental propertiles d Tonal ot all amounta raportad on line 4 for all royalty propartis Total of all amounts reportad on ine 12 for all properties f Total of all amounts reported on ine 18 for all properties g Totalofallarnarta reported on İrs20fraa propertie 24 Inoome. Add posithe amounts shown on line 21. Do not include any losses 25 Loasas. Addyiy loasas from line 21 and ental real astate lsses lhom lina 22. Enter total losses here 25 26 Total rental real ostale and royalty income or 0oss). Combine lines 24 and 25. Enter the reaut hara. H Parts IL IB, V and line 40 an page 2 do not apply to you, also enter this amount on Form 1040, ine Far Paperwork duction Act Notice, see your tax return instructions. Moving Expenses o 3903 2012 informoon about Form 39es and its instruoions is availle ฮ' wwwas.gowronnS903. e. 170 Before you the Distance Test and Time Test in Sce Members of the Amed Forces in the instructions,f applicable. Transportation and storage of household goods and personal eflects (see instructione 2Trael Iincluding lodging) trom your od home so your now home (asa instructionst. Do not 4 Enter the total amount your employer paid you for the expenses lsted on lines 1 and 2 that is not indluded in box 1 of your Form W-2 (wages This amount should be shown in bax 12 of your 5 sline 3 more than ine 47 No You cannot dleduct your moving experses. t ine 3 is leas than line 4, subtract ine 3 rom ine 4 and includle the resuit on Fonm 1040 ine 7, or Form 1040NP, line 8 Yes. Subtract ine 4 from ine 3. Enter the result here and on Form 1040, Ine 26, or Fom 104ONR, ine 26. This is For Popenork Reduction Act Notice. set Your tax return nstrwtor15 Na 124 3903 Moving Expenses OMB No. 1545-0074 Form Department of the ntemal Revenue Service Information about Form 3903 and its instructions is available at www.irs.gov/form3903. Attach to Form 1040 or Form 1040NR Sequence No. 170 Your soolal scourity number Namos shown on rebum Before you begin: See the Distance Test and Time Test in the instructions to find out if you can deduct your moving expenses See Members of the Armed Forces in the instructions, if applicable. 1 Transportation and storage of household goods and personal effects (see instructions) 2 Travel (including lodging) from your old home to your new home (see instructions). Do not include the cost of meals 3 Add lines 1 and 2 . Enter the total amount your employer paid you for the expenses listed on lines 1 and 2 that is not included in box 1 of your Form W-2 (wages). This amount should be shown in box 12 of your Form W-2 with code P 5 Is line 3 more than line 4? No. You cannot deduct your moving expenses. If line 3 is less than line 4, subtract line 3 from line 4 and include the result on Form 1040, line 7, or Form 1040NR, line 8. Yes. Subtract line 4 from line 3. Enter the result here and on Form 1040, line 26, or Form 1040NR, line 26. This is For Paperwork Reduction Act Notice, see your tax return instructions Cat. No. 12490K Farm 3903(2012) 3903 Moving Expenses OMB No. 1545-0074 Form Department of the ntemal Revenue Service Information about Form 3903 and its instructions is available at wwww.rs.gov/form3903. Attach to Form 1040 or Form 1040NR Sequence No. 170 Your sooial scourity number Namos shown on rebum Before you begin: See the Distance Test and Time Test in the instructions to find out if you can deduct your moving expenses See Members of the Armed Forces in the instructions, if applicable. 1 Transportation and storage of household goods and personal effects (see instructions) 2 Travel (including lodging) from your old home to your new home (see instructions). Do not include the cost of meals 3 Add lines 1 and 2 Enter the total amount your employer paid you for the expenses listed on lines 1 and 2 that is not included in box 1 of your Form W-2 (wages). This amount should be shown in box 12 of your Form W-2 with code P 4 5 Is line 3 more than line 4? No. You cannot deduct your moving expenses. If line 3 is less than line 4, subtract line 3 from line 4 and include the result on Form 1040, line 7, or Form 1040NR, line 8. Yes. Subtract line 4 from line 3. Enter the result here and on Form 1040, line 26, or Form 1040NR, line 26. This is For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 12490K Farm 3903 (2012 U.S. Individual Income Tax Returm 1 Sing Marred ling jointy dvenit only one had income more than toar 8a Teanbile interest Anach Scheduie 8 required aredts, or Alimony received CorG-EZ Adjusted Set-employed SEP,SIMPLE, and qualed plans Student loa Fom 1040 SCHEDULE E Form 1040) Supplemental Income and Loss No.1845-034 From rental real estate, royalties, partnerships S corporations, estates, trusts, REMICs, etc 2011 Amach to Fom or Fom 1041 Did you mul อ aay payments in 2011 that would Nqin you to Slo Forme%) 10997 ง900 nstructions B If Yea did you or wil you ie ull required Forns 1099 Schedule C or CEZ (see iretroton Caution. For each resti. property leted on 'ne 1 check box inthe ๒st column or y T you owned that property as 8 member ora qualfied joint anture(a) aporting income not subiect to sel-employment tax Physcal address of each property-street, city, state, zp Days Use Days Type of Property 1 Single Family Resideno 3 Vacation/Short-Tem Rental Land アSeAertal 3a Mechant cand and fhird paty paymenis For 2011 enr Termetsnotrenganonisonineathat are not reported to yoy on ine Total not indlud ng amounts on ine3a that are not 4 . Autoand travel (instructions) 7 Ceaning and mainmienance 10 Legal and ofher professional fees 1 Management fees 12 Mortgage imerest paid to banks, etc sea inatructions 4 Repais. 5 Supplis Taxes 18 Dopreciation xperee or deplesion Otr 20 Totalexpanses Adid ins 5 through 19 Subtract line 20 fom ine&. If result is a os 22 Deductble rental real estate loss ater Iimitation any on Form 8502 tsee instructions 23a Total of al amourea reported on ie 3a for all rertal properties b Total of al amounts repored on ina 3a for all royaty properios с Totalotalamounts reportedonin, 4 for all rental properties d Total ฏ1 a. armoures reponed on ine 4 for al' royaty popartis e Total of all amounts reported on ine 12 for all properties fTotal af al amounts reported on ine 18 for all properties Total af all amounts reportedi on 24 Income. Add positive amounts shown on ine 21. Do not include any losses 5 Losses Add rayahy lasses from line 21 and ant neales ess from ine 22. Etar tetal losses hae 25 26 Total rental real estale and royalty income or 0ass. Combine lines 24 and 25. Enbar e hara Pata I, IIL V, and line 40 on paga 2 do not apply o you, also nerthis amount on Form 1040, line For Papenwork Reduetion Act Notice.