Question

Please complete just Form 1040 (you do not need to fill out a Schedule C or Schedule D, but you can use them to calculate numbers to enter into Form 1040) for a client with the following tax situation:

Paul Gigornovich

Address: 123 HillCrest Lane, San Diego, CA 92101

Wage income: $45,000/00

W2 Federal Tax Withholdings: $4,000.00

Net Long Term Stock Sales Gain: $8,000.00

Net Short Term Sock Sale Loss: -$12,000.00

Sole Proprietorship Business

Gross Income: $80,000.00

Expenses:

Interest: $8,000.00

Meals: $400.00

Continuing Education 1 day Program where he had to fly to a different state:

$900 Airfare

$600 Hotel ($300 per night)

$250 Meals (over and above the other $400.00 in meals) ($125 per day)

$350 Opera Tickets

Answer 1

Wage Income		$      45,000
Schedule C - Business Income
Gross Income	$      80,000
Less Expense
Interest Expense	$       (8,000)
Meals	$          (400)
Travel Expense (900+300+125)	$       (1,325)
Business Income		$      70,275
Schedule D - Capital Gains & Losses
Net Long term stock sales gain	$         8,000
Net Long term stock sales loss	$     (12,000)
Net Capital gain / loss	$       (4,000)
Less: Adjusted against ordinary income	$         3,000
Less: Loss Carryforward	$         1,000
Capital Gains & Losses		$               -
Capital gain adjusted against ordinary income		$       (3,000)
Adjusted Gross Income		$    112,275
Less Standard Deduction		$    (12,200)
Taxable Income		$    100,075
Federal Income Tax amount
$0 to $9700 - 10%	$            970
$9701 to $39,475 - 12%	$         3,573
$39,476 to $84,200 - 22%	$         9,840
$84201 to $100,075 - 24%	$         3,810	$      18,193
Less Federal Income Tax Withheld		$       (4,000)
Tax Due		$      14,193

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