Question

Fill out schedule D with these Facts

Facts:

Brian and Sheila Williams were married in October of 2008. They live at 1000 Main Street, Atlanta, GA 33127. Brian is a postal service worker. Sheila is a teacher at Grady High School. Brian’s social security number is 555-11-1111 and Sheila’s social security number is 555-22-2222. They have a dependent daughter Jayla who is 10 years old (Born on May 12th). Jayla’s social security number is 555-33-3333. In 2016, Brian's wages was $45,860 while Sheila's was $43,590.
Included or Excluded Items
Two years ago, the taxpayer loaned a friend $2000. The friend has filed for bankruptcy this year and will not be able to repay
Earned $100 interest on county municipal bonds
Found a diamond worth $1000 on the ground
Received $500 in death benefits fron Brian's father
Received $4,000 court settlement. $1,000 was punitive damanges.
Brian paid $400/month in child support
Received a $1000 gift from his brother
Sheila won $100 playing bingo
Brian paid $200/month in alimony to his ex-wife
Sheila received a $1000 gift from her mother
Sheila spent $300 on supplies for her classroom
Portfolio Investments
Stock	Acquired	Sold	Sales Price	Cost (Basis)	Qualified Dividends
Red Stock	2/1/2016	10/5/2016	$6,000	$2,500	$0
White Stock	6/11/2009	10/15/2016	$5,000	$4,000	$100
Blue Stock	10/1/2005	8/3/2016	$2,000	$10,000	$0
Black Stock	3/6/2016	12/15/2016	$3,000	$5,000	$0
Yellow Stock	4/5/2006	N/A	N/A	$5,000	$300
Interest Income Source	Amount
Money Market Account	$200
Savings Account	$25
State Municipal Bonds	$35
Rental Property
They own and rent two pieces of residential real estate in Miami, FL. These properties were acquired with cash (so there are no mortgages on the homes). They both have real estate broker licenses in Georgia and Florida. They dedicate enough hours (through their business) to qualify as a “real estate professional” with regard to these properties.
Property 1
The first property is located at 17750 NW 17th Ave, Miami, FL. They collect $1,000 monthly in rent. The property was purchased June 30, 2016 for $150,000. The tax records show that the value of the land is $30,000 and the value of the home was $90,000 when purchased. They actively participate in the management of the real property.
The property has the following expenditures:
Property tax		$7,000/yr
Repairs		$   900/yr
Insurance		$1,200/yr
Washing Machine		$300		(purchased 6/2/2015)
Refrigerator		$700		(purchased 7/1/2016)
Furniture		$2,000		(purchased 4/1/2014)
Property 2
The second property is located at 5610 NW 11th Ave, Miami, FL. They collect $1,500 monthly in rent. The property was purchased on June 12, 2016 for $100,000. The tax records show that the value of the land is $20,000 and the value of the home was $80,000 when purchased. They actively participate in the management of the real property.
The property has the following expenditures:
Property tax		$6,200/yr
Repairs		$3,000/yr
Insurance		$1,200/yr
Legal fees		$   500/yr
Advertising Expense		$   500/yr

"SCHEDULE D (Form 1040) Department of the Treasury Internal Revenue Service (99)" "Capital Gains and Losses ? Attach to Form 1040 or Form 1040NR. ? Information about Schedule D and its separate instructions is at www.irs.gov/scheduled. ? Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10." OMB No. 1545-0074 "2016 Attachment Sequence No. 12" Name(s) shown on return Your social security number Part I Short-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. This form may be easier to complete if you round off cents to whole dollars." (d) Proceeds (sales price) "(e) Cost (or other basis)" "(g) Adjustments to gain or loss from Form(s) 8949, Part I, line 2, column (g)" (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with 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 ." "1b Totals for all transactions reported on Form(s) 8949 with Box A checked . . . . . . . . . . . . ." "2 Totals for all transactions reported on Form(s) 8949 with Box B checked . . . . . . . . . . . . ." "3 Totals for all transactions reported on Form(s) 8949 with 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long- term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back . . . . ." 4 5 6 ( ) 7 Part II Long-Term Capital Gains and Losses—Assets Held More Than One Year "See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars." (d) Proceeds (sales price) "(e) Cost (or other basis)" "(g) Adjustments to gain or loss from Form(s) 8949, Part II, line 2, column (g)" (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with column (g) "8a Totals for all long-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 8b ." "8b Totals for all transactions reported on Form(s) 8949 with Box D checked . . . . . . . . . . . . ." "9 Totals for all transactions reported on Form(s) 8949 with Box E checked . . . . . . . . . . . . ." "10 Totals for all transactions reported on Form(s) 8949 with Box F checked . . . . . . . . . . . . . ." "11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 . . . . . . . . . . . . . . . . . . . . . . 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions . . . . . . . . . . . . . . . . . . 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . 15 Net long-term capital gain or (loss). Combine lines 8a through 14 in column (h). Then go to Part III on the back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ." 11 12 13 14 ( ) 15 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H Schedule D (Form 1040) 2016

Answer 1

Included	Excluded	Gross Income
-	Two years ago, the taxpayer loaned a friend $2000. The friend has filed for bankruptcy this year and will not be able to repay	$         -
-	Earned $100 interest on county municipal bonds	$         -
Found a diamond worth $1000 on the ground	-	$ 1,000
	Received $500 in death benefits from Brian's father	$         -
Received $4,000 court settlement. $1,000 was punitive damages.	-	$ 1,000
Brian paid $400/month in child support	-	$ 4,800
	Received a $1000 gift from his brother	$         -
Sheila won $100 playing bingo	-	$     100
-	Brian paid $200/month in alimony to his ex-wife	$         -
-	Sheila received a $1000 gift from her mother	$         -
-	Sheila spent $300 on supplies for her classroom	$         -
		$ 6,900

Column A Column B

Deductible Items: To be appeared on Form 1040

1. Loan - $2000 NA

2. Child Support - $4800 per year No.28 (Other Miscellaneous Deductions)

3. Alimony - $ 2400 No.28 (Other Miscellaneous Deductions)

4. Supplies to Class room - $300   No.21 (Unreimbursed employee expenses)

5. Capital Loss (Blue Stock)- $8000 NA

6. Capital Loss (Black Stock) - $2000 NA

7. Property Tax(Property 1) - $7000   No.7 (Property taxes)

8. Repairs (Property 1)- $900   No.28 (Other Miscellaneous Deductions)

9. Insurance (Property 1)- $1200 No.28 (Other Miscellaneous Deductions)

10. Property Tax(Property 2) - $6200 No.7 (Property taxes)

11. Repairs (Property 2)- $3000   No.28 (Other Miscellaneous Deductions)

12. Insurance (Property 2)- $1200 No.28 (Other Miscellaneous Deductions)  

13. Legal Fees (Property 2) - $500   No.28 (Other Miscellaneous Deductions)

14. Advertising Expense(Property 2) - $500 No.28 (Other Miscellaneous Deductions)