Question

Debra Simon is a single taxpayer. She is employed as a corporate attorney and lives at 1400 Sand Dollar Circle, Sandville, FL 33868. Her Social Security number is 412-34-5670.

For tax year 2017, Debra had the following income information:

Wages	$155,000
Social Security Withholding	$7,886
Medicare withholding	$2,248
Federal income tax withholding	$34,550
State income tax withholding	$0
New Bank 1099-INT	$5,500
Hope Bank 1099-INT	$3,875

Debra had the following stock transactions during 2017. A 1099-B was received for the proceeds of each sale:

Transaction	Purchased	Sold	Proceeds	Cost	Sales Expenses
300 sh. IBM	01/05/10	05/11/17	$16,500	$14,100	$875
200 sh. SMI	01/05/10	05/15/17	41,000	41,800	2,050
100 sh. BMI	03/05/16	04/12/17	10,500	11,400	525
300 sh. ABC	07/05/17	09/15/17	16,500	14,100	825
300 sh. DDC	05/12/17	10/11/17	45,000	51,000	2,250
300 sh. PPC	01/05/10	05/11/17	5,000	2,800	250
4,000 sh. LLP	Inherited	12/11/17	436,000	*	21,800
1,500 sh. QQM	Inherited	05/11/17	41,325	*	2,066

* Debra inherited the LLP stock and the QQM stock when her father passed away on May 1, 2017. Debra's father purchased the LLP stock in 1966 for $35,000. The FMV of the LLP stock at the date of death was $415,500. The QQM stock was purchased by Debra's father on February 6, 2016, for $49,000. The FMV of the QQM stock at the date of death was $49,600.

Debra also sold her wine collection for $38,000. She had purchased the wine on January 5, 2012 for a total of $19,000.

Debra has a capital loss carryover from 2016 of $11,700: $3,000 short-term and $8,700 long-term.

Debra rents a condo (no mortgage interest) and lives in Florida (no state income tax). Thus she claims the standard deduction.

Complete the 2017 tax return for Debra Simon and a Schedule D.

Answer 1

Below are the details of Form 1040 and Schedule D

Form 1040
Line item no.	Filing Status and Exemptions
1	Filing status	Single
2	Personal exemption	no
3	Spouse exemption	no
4	Dependents	0
5	Total number of exemptions claimed	0
6	Income
7	Wages, salaries, tips, etc	$155,000
8	Spouse wages, salaries, tips, etc	$0
9	Taxable interest	$9,375
10	Tax-exempt interest	$0
11	Ordinary dividends (this includes any qualified dividends)	$0
12	Qualified dividends (included in ordinary dividends above)	$0
13	Taxable refunds or credits of state and local income taxes	$0
14	Alimony received	$0
15	Business income or loss (Schedule C & E subject to self-employment taxes)	$0
16	Spouse's business income or loss (Schedule C & E subject to self-employment taxes)	$0
17	Short term capital gain or loss*	$3,000
18	Long term capital gain or loss*	$0
19	Other gains or losses	$0
20	Taxable IRA distributions	$0
21	Taxable pensions and annuity distributions	$0
22	Intangible drilling costs (IDC) for investor general partners	$0
23	Income from rentals, royalties, S Corporations and Schedule E (not included above and subject to NIIT)	$0
24	Income from rentals, royalties, S Corporations and Schedule E (not included above and not subject to NIIT)	$0
25	Farm income or loss (Schedule F)	$0
26	Unemployment compensation	$0
27	Taxable Social Security benefits	$0
28	Other income	$0
29	Total income	$167,375
30	Adjusted Gross Income
31	Educator expenses	$0
32	Certain business expenses (form 2106)	$0
33	Health Savings Account (HSA) deduction (form 8889)	$0
34	Moving expenses (form 3903)	$0
35	Self-employment tax deduction (Schedule SE)	$0
36	Self-employed SEP, SIMPLE and qualified plans	$0
37	Self-employed health insurance deduction	$0
38	Penalty on early withdrawal of savings	$0
39	Alimony paid	$0
40	IRA deduction	$0
41	Student loan interest deduction	$0
42		Based on a modified AGI of $167,375 and total allowable student loan interest of $0
43	Tuition and fees deduction (Form 8917)	$0
44		Based on a modified AGI of $167,375 and total allowable tuition and fees of $0
45	Domestic production activities deduction (form 8903)	$0
46	Total adjustments	$0
47	Adjusted gross income (AGI)	$167,375
48	Tax
49	65 or older?	no
50	Blind?	no
51	Spouse 65?	no
52	Spouse blind?	no
53	Total checked above	0
54	Married filing separately	no
55	Itemized deduction	$0
56	Can someone claim you as a dependent?	no
57	Standard deduction	$6,350
58	Deduction to use (higher of Standard deduction and Itemized deduction)	$6,350
59	Deduction for exemptions	$0
60	Taxable income	$161,025
61	Tax*	$38,069
62
63		All taxable income was taxed using your normal income tax rates, you had no income subject to the lower long term capital gains tax rates or dividend tax rates.
64	Alternative Minimum Tax (AMT)	$0
65	Excess advance premium tax credit repayment (form 8962)	$0
66	Total tax	$38,069
67	Credits
68	Foreign tax credit (form 1116)	$0
69	Credit for child and dependent care credit expenses (form 2441)	$0
70	Education credits (form 8863, line 23)	$0
71	Retirement savings contributions credit (form 8880)	$0
72	Child tax credit	$0
73		Based on 0 qualifying dependents.
74	Residential energy credits (Form 5695)	$0
75	American opportunity credit (Form 8863, non-refundable portion)	$0
76	Other credits that are not refundable	$0
77	Total credits that are non-refundable	$0
78	Total tax after credits	$38,069
79	Other Taxes
80	Self-employment tax (Schedule SE)	$0
81	Unreported Social Security and Medicare tax (forms 4137 & 5329)	$0
82	Additional tax on IRAs and other retirement plans (form 5329)	$0
83	Household employment taxes (Schedule H) and Advanced earned income credit (W-2 box 9)	$0
84	First time home buyer credit repayment (Form 5405)	$0
85	Health care: individual responsibility	$0
86	Medicare tax sur-tax on earned income (Form 8959)	$0 (0.9% X $0)
87	Net Investment Income Tax (NIIT) (Form 8960)	$0 (3.8% X $0)
88	Total other taxes	$0
89	Total tax before refundable credits	$38,069
90	Refundable Tax Credits
91	Earned income credit	$0
92	Non-taxable combat pay	$0
93	Reduction for Scholarships, penal income, and retirement income	$0
94	Number of qualifying children	0
95	Lived in the U.S?	yes
96	Qualified child of another?	no
97	Age 25 to 65?	yes
98	Additional child tax credit (form 8812)	$0
99	American opportunity credit (Form 8863, line 14 refundable portion)	$0
100	Net premium credit (form 8962)	$0
101	Other credits that are refundable, including credit for prior year AMT (Form 8801) and other refundable credits and payments	$0
102	Total refundable credits	$0
103	Total Tax Due and Tax Payments
104	Total tax	$38,069
105	Federal income tax withheld on Forms W-2 and 1099	$36,798
106	Estimated tax payments and amount applied on last year's return	$0
107	Excess Social Security and RRTA tax withheld	$7,886
108	Any other payments including amount paid with request for extension	$0
109	Total payments	$44,684
110	Your tax refund	$6,615
111	*Any amount you enter as a short-term capital gain is taxed as normal income. Any amount you enter as a long-term capital gain or dividend is taxed as follows:
112	0% if your ordinary income marginal tax rate is 10% or 15%
113	15% if your ordinary income marginal tax rate is greater than 15% and less than 39.6%
114	20% if your ordinary income marginal tax rate is 39.6%

Schedule D

Notes

Inherited stocks cost is calculated at fair market value. As a benefit inherited stocks gain or loss is referred as long term gain/loss only.

SCHEDULE D OMB No. 1545-0074 Capital Gains and Losses Attach to Form 1040 or Form 1040NR. Go to www.irs.govlScheduleD for instructions and the latest information. Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. (Form 1040) 2017 Department of the Treasury Internal Revenue Service (99 Sequence No. 12 Name(s) shown on return Your social security number PartShort-Term Capital Gains and Losses-Assets Held One Year or Less See instructions for how to figure the amounts to enter on the lines below Gain or loss) Subtract column (e from column (d) and Proceeds Cost to gain or loss from This form may be easier to complete if you round off cents to (sales price) whole dollars. (or other basisForm(s) 8949, Part combine the result with line 2, column (g) column (g) 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b 58425 65100 -6675 1b Totals for all transactions reported on Form(s) 8949 with 2 Totals for all transactions reported on Form(s) 8949 with 3 Totals for all transactions reported on Form(s) 8949 with Box A checked Box B checked Box C checked 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824. 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 . Worksheet in the instructions term capital gains or losses, go to Part Il below. Otherwise, go to Part Ill on the back 5 . . 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover 6 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long- 7 -6675

Notes

Transaction	Net Proceeds	Cost	Type	Gain (loss)
300 sh. IBM	15625	$14,100	Long term	1525
200 sh. SMI	38950	41,800	Long term	-2850
100 sh. BMI	9975	11,400	Long term	-1425
300 sh. ABC	15675	14,100	Short term	1575
300 sh. DDC	42750	51,000	Short term	-8250
300 sh. PPC	4750	2,800	Long term	1950
4,000 sh. LLP	414200	415500	Long term	-1300
1,500 sh. QQM	39259	49600	Long term	-10341