Question

Rebecca and Walter Bunge have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Rebecca is a homemaker and Walt is a high school teacher. Rebecca's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Walt's earnings from teaching are:

a Employee's social security number 700-01-0002 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) 31-1238967 1 Wages, tips, other compensation 50,500.00 2 Federal income tax withheld 4,800.00 c Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169 3 Social security wages 50,500.00 4 Social security tax withheld 3,131.00 5 Medicare wages and tips 50,500.00 6 Medicare tax withheld 732.25 7 Social security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee's first name and initial Last name Walter Bunge 883 Scrub Brush Street, Apt 52B Las Vegas, NV 89125 Suff. 11 Nonqualified plans 12a See instructions for box 12 C o d e P 500.00 13 Statutory employee Retirement plan Third-party sick pay ? ? ? 12b C o d e DD 7,800.00 14 Other 12c C o d e 12d C o d e f Employee's address and ZIP code 15State NV 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.

The Bunges incurred the following expenses during their move from Maine to Nevada in January of 2016:

Cost of moving furniture $4,750 Travel (3,837 miles at $0.19) 729 Lodging en route 280 Meals en route 90 House-hunting trip before the move 750

The school district reimbursed Walter $500 for moving expenses. These are reflected on his W-2. Walter’s previous job, as a high school teacher in Maine, was only 5 miles from his home. Rebecca was unemployed prior to the move.

The Bunges own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 185 days during 2016 and used by the Bunges for 15 days. Pertinent information about the condo rental is as follows:

Rental income $16,000 Mortgage interest reported on Form 1098 8,600 Homeowners' association dues 5,200 Utilities 1,000 Maintenance 3,880 Depreciation (assume fully depreciated) 0

The above amounts do not reflect any allocation between rental and personal use of the condo. The Bunges are active managers of the condo.

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

Required:

Complete the Bunge's federal tax return for 2016. Use Form 1040, Schedule E, Form 3903, and Form 8582 to complete their tax return.

If an amount box does not require an entry or the answer is zero, enter "0". Do not round any percentages. If required, round your answers to the nearest dollar. If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers.

Note: Special instructions for Form 8582 - If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Answer 1

Tax amount taken from 1040 instruction's 2016 tax table.

Distribution of rental income from rental to personal use is below, based on number of days used for each purpose:

	185	15	Total
Expenses:
Mortagage	7,955	645	8,600
Association	4,810	390	5,200
Utilities	925	75	1,000
Maintenance	3,589	291	3,880
Total	17,279	1,401	18,680

Filled in form's are below:

Househunting and meals en route are not qualified moving expenses.