Question

Show all calculations within the cells of the template. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well; no hard coding of solutions. Submit a single MS Excel file for grading.

The deliverable is as follows:

The completed Form 1040-Schedule E template.

ACT405 – Portfolio Project Case 1

Comprehensive Tax Problem – Option 1

Taxpayer Information

   Name: John Washington

   Address: 3450 Green St.

          Miami, FL 54321

   DOB: 5/5/1960

   Filing Status: Married

   SSN: 434-20-2020

   Occupation: Engineer

   Name: Debra Washington

   Address: 3450 Green St.

       Miami, FL 54321

   DOB: 7/7/1962

   Filing Status: Married

   SSN: 411-21-4568

   Occupation: Teacher

INCOME INFORMATION:

   Wages and Compensation

The following information is taken from John Washington’s 2017 Form W-2 Wage and Tax Statement:

          

Box 1 – Wages, tips, and other compensation	80,000
Box 2 – Federal Withholding	12,500
Box 17 – State Income Tax Withholding	2,000

      

The following information is taken from Debra Washington’s 2017 Form W-2 Wage and Tax Statement:

          

Box 1 – Wages, tips, and other compensation	42,000
Box 2 – Federal Withholding	3,500
Box 17 – State Income Tax Withholding	750

   Interest and Dividends

   John had interest income from a savings account from Everest Bank of $500.00

   Debra had dividend income of $550 from Blue Co. stock.

   Capital Gains

   John had the following stock transactions in 2017:

He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2017, which he purchased on April 1, 2017 for 25,000

   Rental Real Estate

The couple owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit are as follows:

       Rental income           $12,000

       Property taxes            $1,500

       Depreciation           $1,000

       Repairs and Maintenance $750

       Insurance           $2,000

Other Transactions in 2017

1. Debra had educator expenses in 2017 of $450.00

2. John had gambling winnings of $1,000.

3. John was the beneficiary of his mother’s life insurance policy.

His mother died in 2017 and he received $50,000 under this policy.

   4. Debra paid $700 in student loan interest.

Answer 1

  JOHN WASHINGTON :-

WAGES TIPS AND OTHER COMPENSATION:- 80000

FEDERAL WITHHOLDING 12500

STATE INCOME TAX WITHHOLDING 2000

INTEREST INCOME FROM SAVING ACCOUNT 500

SHORTERM CAPITAL GAIN 13000

INCOME FROM HOUSE PROPERTY [12000-1500] 10500

INCOME FROM GAMBLING 1000

TOTAL INCOME 119500

DEDUCTION

INCOME FROM SAVING ACCOUNT 500

NET INCOME 119000   

TAX PAID IN ADVANCE[ WITHHOLD] 14500

DEBRA WASHINGTON   

WAGES ,TIPS AND COMPENSATION 42000

FEDERAL WITHHOLDING 3500

STATE INCOMETAX WITHHOLDING 750

TOTAL INCOME 46250

DEDUCTIONS

EDUCATOR EXPENSES 450   

STUDENT LOAN INTEREST 700

NET INCOME 45100

TAX PAID IN ADVANCE [ WITHHOLDING] 4250.

NOTES 1] INTEREST INCOME FROM SAVING ACCOUNT IS DEDUCTIBLE UPTO 10000 AS PER SECTION 80 TTA.

2] DIVIDEND INCOME IS EXEMPT.

3] IF SHARES ARE HELD FOR LESS THAN 12 MONTHS THAN IT IS SHORTTERM CAPITAL GAIN.

4] EXPENSES IS NOT DEDUCTED FOR THE CALCULATION OF HOUSE PROPERTY INCOME.

5]LIFE INSURANCE POLICY FUND RECEIVED BY BENEFICIARY IN NOT TAXABLE.