In: Accounting
Obtain the supporting information from your Portfolio Project option. You will also use the Schedule A template included under that same option as applicable. If Schedule A is not applicable, state so on the form.
Show all calculations within the cells of the template. This means that you must use formulas and links so that your 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.
Review the Portfolio Project Milestone Rubric to understand how you will be graded on the project.
The deliverables are as follows:
The completed Form 1040-Schedule A template.
Case:
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 | Reasoning for Including or Excluding and if Including, Indicate amount to include | ||||||||||||||||||||||
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 A:
SCHEDULE A | OMB No. 1545-0074 | |||||||||||||||
(Form 1040) | Itemized Deductions | 2016 | ||||||||||||||
Department of the Treasury Internal Revenue Service (99) | ? Information about Schedule A and its separate instructions is at www.irs.gov/schedulea | Attachment | ||||||||||||||
? Attach to Form 1040. | Sequence No. 07 | |||||||||||||||
Name(s) shown on Form1040 | Your social security number | |||||||||||||||
Medical and Dental Expenses | Caution. Do not include expenses reimbursed or paid by others. | |||||||||||||||
1 | Medical and dental expenses (see instructions)..... | 1 | ||||||||||||||
2 | Enter amount from Form 1040, line 38 | 2 | ||||||||||||||
3 | Multiply line 2 by 10% (.10). But if either you or your spouse was | |||||||||||||||
born before January 2, 1949, multiply line 2 by 7.5% (.075) instead | 3 | |||||||||||||||
4 | Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . | 4 | ||||||||||||||
Taxes You Paid | 5 | State and local (check only one box): | ||||||||||||||
a ? Income tax or | } | . . . . . | . . | |||||||||||||
b ? General sales tax | 5 | |||||||||||||||
6 | Real estate taxes (see instructions) . . . . . . . . . | 6 | ||||||||||||||
7 | Personal Property taxes. | . . . . . . . . . . . | 7 | |||||||||||||
8 | Other taxes. List type and amount > | . | ||||||||||||||
8 | ||||||||||||||||
9 | Add lines 5 through 8 | 9 | ||||||||||||||
Interest You
Paid Note. Your mortgage interest deduction may be limited (see instructions). |
10 | Home mortgage interest and points reported to you on Form 1098 | 10 | |||||||||||||
11 | Home mortgage interest not reported to you on Form 1098. If paid | |||||||||||||||
to the person from whom you bought the home, see instructions | ||||||||||||||||
and show that person’s name, identifying no., and address ? | ||||||||||||||||
11 | ||||||||||||||||
12 | Points not reported to you on Form 1098. See instructions for | |||||||||||||||
special rules . . . . . . . . . . . . . . . . . . . . | 12 | |||||||||||||||
13 | Mortgage insurance premiums (see instructions) . . . . . | 13 | ||||||||||||||
14 | Investment interest. Attach Form 4952 if required. (See instructions.) | 14 | ||||||||||||||
15 | Add lines 10 through 14. . . . . . . . . . . . . . . . . . . . . . . . . . | 15 | ||||||||||||||
Gifts to | 16 | Gifts by cash or check. If you made any gift of $250 or more, | ||||||||||||||
Charity | see instructions. . . . . . . . . . . . . . . . | 16 | ||||||||||||||
if you made a | 17 | Other than by cash or check. If any gift of $250 or more, see | ||||||||||||||
gift and got a | instructions. You must attach Form 8283 if over $500 . . . | 17 | ||||||||||||||
benefits for it ., | 18 | Carryover from prior year . . . . . . . . . . . . | 18 | |||||||||||||
see instructions | 19 | Add lines 16 through 18. . . . . . . . . . . . . . . . . . . . . . . | 19 | |||||||||||||
Casualty and Theft Losses | 20 | Casualty or theft loss(es). Attach Form 4684. (See instructions.) . | . . . . . . . | 20 | ||||||||||||
Job Expenses and Certain Miscellaneous Deductions | ||||||||||||||||
21 | Unreimbursed employee expenses—job travel, union dues, | 21 | ||||||||||||||
ob education, etc. Attach Form 2106 or 2106-EZ if required. | 22 | |||||||||||||||
(see instructions) ? | ||||||||||||||||
22 | Tax preparation fees . . . . . . . . . . . . . | |||||||||||||||
23 | Other expenses—investment, safe deposit box, etc. List type | |||||||||||||||
and amount ? | 23 | |||||||||||||||
24 | ||||||||||||||||
24 | Add lines 21 through 23 . . . . . . . . . . . . | |||||||||||||||
25 | Enter amount from Form 1040, line 38 | 25 | ||||||||||||||
26 | Multiply line 25 by 2% (.02). . . . . . . . . . . . . . . . | 26 | ||||||||||||||
27 | Subtract line 26 from line 24. If line 26 is more than line 24, enter -0-. . . . . . | 27 | ||||||||||||||
Other Miscellaneous Deductions | 28 | Other—from list in instructions. List type and amount ? | ||||||||||||||
28 | ||||||||||||||||
Total Itemized Deductions | 29 | Is Form 1040, line 38, over $150,000? | ||||||||||||||
? No. Your deduction is not limited. Add the amounts in the far right column | } | |||||||||||||||
for lines 4 through 28. Also, enter this amount on Form 1040, line 40. | ||||||||||||||||
? Yes. Your deduction may be limited. See the Itemized Deductions | . . | 29 | ||||||||||||||
Worksheet in the instructions to figure the amount to enter. | ||||||||||||||||
30 | If you elect to itemize deductions even though they are less than your standard | |||||||||||||||
deduction, check here . . . . . . . . . . . . . . . . | ? | ? | ||||||||||||||
For Paperwork Reduction Act Notice, see Form 1040 instructions. Cat. No. 17145C | Schedule A (Form 1040) 2016 |
Form 1040
Form 1040 Department of the Treasury | Internal Revenue Service | 2016 | |||||||||||
U.S. Individual Tax Form | |||||||||||||
OMB No.1545-0074 | IRS Use Only--Do not write or staple in this space | ||||||||||||
For the year Jan.1--Dec. 31,2016, or any other tax year beginning | ,2016, | ,20 | See Separate Instructions | ||||||||||
Your first name and initial | Last name | Social Security Number | |||||||||||
If a joint return, spouses first name and initial | Last name | Spouse Social Security Number | |||||||||||
Home address( number and street). If you have a P.O. Box, see instructions | Make Sure that the SSN(s) above | ||||||||||||
and on line 6c are correct | . | ||||||||||||
City, town, or post office, state, and zip code. If you have a foreign address, also complete spaces below (see instructions). | Presidential Election Campaign | ||||||||||||
Check here if you, or your spouse if filing jointly, | |||||||||||||
Foreign country name | Foreign province/state/country | Foreign postal code | checking this box below will not change your tax | ||||||||||
refund. | you | spouse | |||||||||||
Filing Status | 1. Single | 4.Head of Household (with qualifying person.) (See instructions.) If | |||||||||||
Check only one box | 2.. married filing jointly | the qualifying person is a child but not your dependent, enter this | |||||||||||
3. Married filing separately. Enter spouse's SSN above | child's name here | ||||||||||||
and full name here. | 5. Qualifying Window(er) with dependent child | ||||||||||||
Exemptions | 6a Yourself. If someone can claim you as a dependent, do not check box 6a | ] | Boxes checked | ||||||||||
b spouse | ] | on 6a and 6b | |||||||||||
If more than four | c. Dependents | ||||||||||||
dependents, see | (1) First name | Last name | (2) dependents | (3) dependents | (4) check if child under age 17 | No. of children | |||||||
instructions and | social security number | relationship to you | qualifying for tax credit see | on 6c who: | |||||||||
check here | instructions. | lived with you | |||||||||||
did not live with you | |||||||||||||
due to divorce or | |||||||||||||
separation | |||||||||||||
(see instructions) | |||||||||||||
Dependents on | |||||||||||||
6c not entered | |||||||||||||
above | |||||||||||||
d. Total number of Exemptions Claimed | Add numbers on lines above | ||||||||||||
Income | 7 | Wages, salaries, tips, etc. Attach Forms (W-2) | 7 | 7000 | |||||||||
8a | Taxable interest. Attach Schedule B if required | 8a | |||||||||||
Attach Form(s) | b | Tax-exempt interest. Do not include on line 8a | 8b | ||||||||||
W-2 here. Also | 9a | Ordinary dividends. Attach Schedule B if required | 9a | ||||||||||
attach Forms(s) | b | Qualified dividends | 9b | ||||||||||
W-2 and 1099-R | 10 | Taxable refunds, credits, or offsets state or local income taxes | 10 | ||||||||||
if tax was withheld. | 11 | Alimony received | 11 | ||||||||||
12 | Business income or (loss). Attach Schedule C or C-EZ | 12 | |||||||||||
If you did not | 13 | Capital gain or (loss). Attach Schedule D if required. If not required, check here | 13 | ||||||||||
get a W-2, | 14 | other gains or (losses). Attach Form 4797 | 14 | ||||||||||
see instructions | 15a | IRA distributions | 15a | b Taxable amount | 15b | ||||||||
16a | Pensions and annuities | 16a | b Taxable amount | 16b | |||||||||
17 | Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E | 17 | |||||||||||
18 | Farm income or (loss). Attach Schedule F | 18 | |||||||||||
19 | Unemployment compensation | 19 | |||||||||||
20a | Social security benefits | 20a | b Taxable amount | 20b | |||||||||
21 | other income. List type and amount | 21 | 300 | ||||||||||
22 | combine the amounts in the far right column for lines 7 through 21. This is your total income | This is your total income. | 22 | ||||||||||
Adjusted | 23 | Educator expenses | 23 | ||||||||||
Gross | 24 | Certain business expenses of reservists, performing artists, and fee-basis government. Attach Form 2106 or 2106-EZ | 24 | ||||||||||
Income | |||||||||||||
25 | Health-savings account deduction. Attach Form 8889 | 25 | |||||||||||
26 | Moving Expenses. Attach Form 3903 | 26 | |||||||||||
27 | Deductible part of self-employment tax. Attach Schedule SE | 27 | |||||||||||
28 | Self-employed SEP, SIMPLE, and qualified plans | 28 | |||||||||||
29 | Self-employed health insurance deduction | 29 | |||||||||||
30 | Penalty on early withdrawal of savings | 30 | |||||||||||
31a | Alimony paid b. Recipient's SSN | 31a | |||||||||||
32 | IRA deduction | 32 | |||||||||||
33 | Student loan interest deduction | 33 | |||||||||||
34 | Tuition and fees. Attach Form 8917 | 34 | |||||||||||
35 | Domestic production activities deduction. Attach Form 8903 | 35 | |||||||||||
36 | Add lines 23 through 35 | 36 | |||||||||||
37 | Subtract line 36 from line 22. This is your adjusted gross income. | 37 |
Included |
Excluded |
Gross Income |
- |
Two years ago, taxpayer loaned a friend $2000. friend has filed for bankruptcy this year and will not be able to repay |
- |
- |
Earned 100 interest on county municipal bonds |
- |
The 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 &B
Deductible Items: To be appeared on Form 1040
1. Loan - 2000 NA
2. Child Support - 4800 per year No.28
3. Alimony - 2400 No.28
4. Supplies to Class room - 300 No.21
5. Capital Loss (Blue Stock) - 8000 NA
6. Capital Loss (Black Stock) - 2000 NA
7. Property Tax (Property 1) -7000 No.7
8. Repairs (Property 1) - $900 No.28
9. Insurance (Property 1) - 1200 No.28
10. Property Tax (Property 2) - $6200 No.7
11. Repairs (Property 2) - 3000 No.28
12. Insurance (Property 2) - 1200 No.28
13. Legal Fees (Property 2) - 500 No.28
14. Advertising Expense (Property 2) - $500 No.28