Question

Dr. George E. Beeper is a single taxpayer born on September 22, 1968. He lives at 45 Mountain View Dr., Apt. 321, Spokane, WA 99210. Dr. Beeper's Social Security number is 775-88-9531. Dr. Beeper works for the Pine Medical Group, and his earnings and income tax withholding for 2016 are:

a Employee's social security number 775-88-9531 OMB No. 1545-0008 Safe, accurate, FAST! Use IRS e ~ file Visit the IRS website at www.irs.gov/efile b Employer identification number (EIN) 36-1389676 1 Wages, tips, other compensation 133,000.00 2 Federal income tax withheld 22,100.00 c Employer's name, address, and ZIP code Pine Medical Group 800 W. 7th Ave. Spokane, WA 92204 3 Social security wages 133,000.00 4 Social security tax withheld 7,347.00 5 Medicare wages and tips 133,000.00 6 Medicare tax withheld 1,928.50 7 Social security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee's first name and initial Last name George Beeper 45 Mountain View Drive, Apt #321 Spokane, WA 92210 Suff. 11 Nonqualified plans 12a See instructions for box 12 C o d e DD 5,700.00 13 Statutory employee Retirement plan Third-party sick pay ? ? ? 12b C o d e 14 Other 12c C o d e 12d C o d e f Employee's address and ZIP code 15State WA Employer's state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Form W-2 Wage and Tax Statement 2016 Department of the Treasury—Internal Revenue Service Copy B–To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service.

Dr. Beeper owns a rental house located at 672 Lake Street, Spokane, WA 99212. The house rents for $1,000 per month and was rented for the entire year. The following are the related expenses for the rental house:

Real estate taxes $5,850 Mortgage interest 14,800 Insurance 2,100 Depreciation (assume fully depreciated) 0 Repairs 450 Maintenance 1,980

The house was purchased on July 5, 1981. Dr. Beeper handles all rental activities (e.g., rent collection, finding tenants, etc.) himself.

During May 2016, Dr. Beeper received the following Form 1099-R:

? CORRECTED (if checked)
PAYER'S name, street address, city or town, state or province, country, and ZIP or foreign postal code Elm Medical Group Retirement Plan 260 E. Central Ave. Spokane, WA 92208			1 Gross distribution $ 67,000.00	OMB No. 1545-0119 2016 Form 1099-R		Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
			2a Taxable amount $ 0.00
			2b Taxable amount not determined ?	Total distribution ?		Copy B Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return. This information is being furnished to the Internal Revenue Service.
PAYER'S federal identification number	RECIPIENT'S identification number		3 Capital gain (included in box 2a)	4 Federal income tax withheld
44-4324567	775-88-9531		$	$ 0.00
RECIPIENT'S name George E. Beeper Street address (including apt. no.) 45 Mountain View Drive City or town, state or province, country, and ZIP or foreign postal code Spokane, WA 92210			5 Employee contributions/Designated Roth contributions or insurance premiums $	6 Net unrealized appreciation in employer's securities $
			7 Distribution code(s) G IRA/SEP/SIMPLE ?	8 Other $	%
			9a Your percentage of total distribution %	9b Total employee contributions $
10 Amount allocable to IRR within 5 years	11 1st year of desig. Roth contrib.	FATCA filing requirement	12State tax withheld $	13 State/Payer's state no.		14 State distribution $
$		?	$			$
Account number (see instructions)			15 Local tax withheld	16 Name of locality		17 Local distribution $
						$

Form 1099-R

www.irs.gov/form1099r

Department of the Treasury - Internal Revenue Service

Dr. Beeper was divorced in 2011. The divorce decree requires Dr. Beeper to pay his ex-wife, Meredith Gray (Social Security number 333-45-1234), $2,000 per month. Dr. Beeper made all his monthly alimony payments in 2016.

Click here to access the tax table to use for this problem.

Required:

Complete Dr. Beeper's federal tax return for 2016. Use Form 1040, Schedule E, and Form 8582 to complete this tax return. Do not complete Form 4562 for reporting depreciation. Make realistic assumptions about any missing data.

If an amount box does not require an entry or the answer is zero, enter "0".

Answer 1

Filled in form 1040:

Schedule E

Form 8582