This is the second part of a six part problem that will allow you to prepare the 2014 tax return


This is the second part of a six part problem that will allow you to prepare the 2014 tax return for Laurie and Lynn Norris. As with the previous parts, this part of the problem will ask you to prepare a portion of their tax return. You should complete the appropriate portion of each form or schedule indicated in the instructions. The following basic information is provided for preparing their 2014 tax return:
• Lynn's brother Joey dies in January. Lynn receives Joey's 2011 Corvette (fair market value $32,000), 200 shares of Goober Corporation stock (fair market value $2,000), and his brother's home (fair market value S 125,000) in settlement of the estate.
• Lynn receives a $100 dividend on the Goober stock in June. In October, Goober declared a 25% stock dividend when the stock is selling for $15. Lynn receives 50 additional shares of stock in November. Lynn sells the 50 dividend shares on December 10 for $700.
• On December 22, Lynn sells Joey's home for $ 128,000
• Laurie works for Fox Corporation as a drilling superintendant. Her annual salary is $96,000. In 2014, she receives a $12,000 bonus. Fox withholds $16,200 of her salary and bonus for federal taxes. Laurie receives the following employment related benefits during 2014:
Fox provides all employees with medical insurance (Laurie's insurance cost $8,600) and group-term life insurance at twice their annual salary up to a maximum coverage of $200,000 (Laurie's premiums cost $560).
Fox has a qualified pension plan that covers all employees. Under the plan, Fox matches contributions to the plan up to 5% of the employee's annual salary. Laurie makes the maximum allowable contribution, which is matched by Fox. Laurie pays $2,000 into the company's flexible benefits plan. Laurie spends $2,200 on medical and dental expenses not covered by insurance. She receives $2,000 from the flexible benefits plan for these expenses.
• Lynn is injured when a motorist hits him while he is riding his bicycle. Lynn sues the driver and receives $3,500 for his medical expenses, $2,000 for pain and suffering, and $1,000 in punitive damages.
Required: Based on the information provided above, only fill out the appropriate portions of Form 1040, Form 1040 Schedule B, and Form 1040 Schedule D.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

This problem has been solved!

Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Related Book For  answer-question

Concepts In Federal Taxation 2016

ISBN: 9781305585133

23rd Edition

Authors: Kevin Murphy, Mark Higgins

View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: July 14, 2016 04:27:50