In: Accounting
Comprehensive Problem 4-1
Skylar and Walter Black have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a homemaker and Walter is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002.
The Blacks incurred the following expenses during their move
from Maine to Nevada in January of 2017:
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The school district reimbursed Walter $550 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. Skylar was unemployed prior to the move.
The Blacks own a ski condo located at 123 Buncombe Lane, Brian
Head, UT 84719. The condo was rented for 183 days during 2017 and
used by the Blacks for 17 days. Pertinent information about the
condo rental is as follows:
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The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo.
Required:
Complete Form 1040 and the schedules and forms provided for the
Blacks.
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.
Walter's earnings from teaching are:
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Form | 1040 | Department of the Treasury––Internal Revenue Service (99) | 2017 | ||||||||||||||||||||||||||||||||
U.S. Individual Income Tax Return | OMB No. 1545-0074 | IRS Use Only—Do not write or staple in this space. | |||||||||||||||||||||||||||||||||
For the year Jan. 1--Dec. 31, 2017, or other tax year beginning | ,2017, ending | See separate instructions. | |||||||||||||||||||||||||||||||||
Your first name and initial | Last name | Your social security number | |||||||||||||||||||||||||||||||||
Skylar | Black | 222-43-7690 | |||||||||||||||||||||||||||||||||
If joint return, spouse's name & initial | Last name | Spouse's social security number | |||||||||||||||||||||||||||||||||
Walter | 700-01-0002 | ||||||||||||||||||||||||||||||||||
Home address (number and street). If you have a P.O. box, see instructions. | Apt. no. |
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Make sure the
SSN(s) above and on line 6c are correct. |
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883 Scrub Brush Street, Apt. 52B, | |||||||||||||||||||||||||||||||||||
City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). | Presidential Election Campaign | ||||||||||||||||||||||||||||||||||
Las Vegas, NV 89125. | Check here if you,
or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or |
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Foreign country name | Foreign province/state/county | Foreign postal code | |||||||||||||||||||||||||||||||||
refund. | You | Spouse | |||||||||||||||||||||||||||||||||
Filing Status | 1 | Single | 4 | Head of household (with qualifying person). (See instructions.) | |||||||||||||||||||||||||||||||
2 | x | Married filing joint return (even if only one had income) | If the qualifying person is a child but not your dependent, enter | ||||||||||||||||||||||||||||||||
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Check only one | 3 | Married filing separate return. Enter spouse's SSN above | this child’s name here. | ||||||||||||||||||||||||||||||||
box. | and full name here. |
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5 | Qualifying widow(er) (see instructions) | |||||||||||||||||||||||||||||||
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Boxes
checked on 6a and 6b. |
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6a | X | Yourself. | If someone can claim you as a dependent, do not check box 6a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2 | |||||||||||||||||||||||||||||||
No. of
children on 6c who: |
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Exemptions | b | X | Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | ||||||||||||||||||||||||||||||||
c | Dependents: | (2) Dependent's | (3) Dependent's |
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• lived with you |
Income | 7 | Wages, salaries, tips, etc. Attach Form(s) W-2 | . . . . . . . . . | 7 | 50,674 | ||||||||||||||||||||||||||||||
8 | a | Taxable interest. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8a | 0 | |||||||||||||||||||||||||||||||
Attach Form(s) | b | Tax-exempt interest. Do not include on line 8a | . . . . . . . . . | 8b | 0 | ||||||||||||||||||||||||||||||
W-2 here. Also | 9 | a | Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9a | 0 | ||||||||||||||||||||||||||||||
attach Forms | b | Qualified dividends | . . . . . . . . . . . . . . . . . . . . . . | 9b | 0 | ||||||||||||||||||||||||||||||
W-2G and | 10 | Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10 | ||||||||||||||||||||||||||||||||
1099-R if tax | 11 | Alimony received | . . . . . . . . . . . . . . . . . . . . | . . . . . . . . | 11 | ||||||||||||||||||||||||||||||
was withheld. | 12 | Business income or (loss). Attach Schedule C or C-EZ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12 | 0 | |||||||||||||||||||||||||||||||
13 | Capital gain or (loss). Attach Schedule D if required. If not required, check here. |
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13 | ||||||||||||||||||||||||||||||||
If you did not | 14 | Other gains or (losses). Attach Form 4797 | . . . . . . . . . . . . . . . . . . . . . . . . . . . | 14 | |||||||||||||||||||||||||||||||
get a W-2, | 15 | a | IRA distributions | 15a | 0 | b | Taxable amount | . . . . . | 15b | 0 | |||||||||||||||||||||||||
see instructions. | 16 | a | Pensions and annuities | 16a | 25,000 | b | Taxable amount | . . . . . | 16b | 0 | |||||||||||||||||||||||||
17 | Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. | 17 | (2,800) | ||||||||||||||||||||||||||||||||
18 | Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 18 | 0 | ||||||||||||||||||||||||||||||||
19 | Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 19 | |||||||||||||||||||||||||||||||||
20 | a | Social security benefits | 20a | 0 | b | Taxable amount . . . . . . . | 20b | 0 | |||||||||||||||||||||||||||
21 | Other income. List type and amount. | 21 | 0 | ||||||||||||||||||||||||||||||||
22 | Combine the amounts in the far right column for lines 7 through 21. | This is your total income |
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22 | 47,874 | ||||||||||||||||||||||||||||||
23 | Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 23 | |||||||||||||||||||||||||||||||||
Adjusted | 24 | Certain business expenses of
reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ |
24 | ||||||||||||||||||||||||||||||||
Gross | 25 | Health savings account deduction. Attach Form 8889 . . . . . . . . . . | 25 | 0 | |||||||||||||||||||||||||||||||
Income | 26 | Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . | 26 | |||||||||||||||||||||||||||||||
27 | Deductible part of self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 27 | 0 | ||||||||||||||||||||||||||||||||
28 | Self-employed SEP, SIMPLE, and qualified plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 28 | |||||||||||||||||||||||||||||||||
29 | Self-employed health insurance deduction | . . . . . . . . . . . . | 29 | ||||||||||||||||||||||||||||||||
30 | Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 30 | 0 | ||||||||||||||||||||||||||||||||
31 | a | Alimony paid | b Recipient's SSN |
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566-74-8765 | 31a | 5,400 | ||||||||||||||||||||||||||||
32 | IRA deduction | . . . . . . . . . . . . . . . . . . | 32 | 0 | |||||||||||||||||||||||||||||||
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 | 5,400 | |||||||||||||||||||||||||||||||
37 | Subtract line 36 from line 22. | This is your adjusted gross income. | . . . . . |
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37 | 42,474 | |||||||||||||||||||||||||||||
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. | Cat. No. 11320B | Form 1040 | |||||||||||||||||||||||||||||||||
Form 1040 (2017) | |||||||||||||||||||||||||||||||||||
Tax and | 38 | Amount from line 37 (adjusted gross income) |
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0 | 0 |
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0 | 0 | 38 | 42,474 | |||||||||||||||||||||||||
Credits | 39 | a | Check | You were born before | January 2, 1953 | Blind. Total boxes | 0 | ||||||||||||||||||||||||||||
Standard | if: | Spouse was born before | January 2, 1953 | Blind. checked |
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Deduction for -- | b | If your spouse itemizes on a separate return or you were a dual-status alien, check here |
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39b | |||||||||||||||||||||||||||||||
• | People who check any box on
line 39a or 39b or who can be claimed as a dependent, see instructions. |
40 | Itemized deductions (from Schedule A) or your standard deduction (see left margin) | . . . . . | 40 | 12,700 | |||||||||||||||||||||||||||||
41 | Subtract line 40 from line 38 | . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 41 | 29,774 | |||||||||||||||||||||||||||||||
42 | Exemptions. | If line 38 is $156,900 or less, multiply $4,050 by number on line 6d. Otherwise, see instructions. | 42 | 8,100 | |||||||||||||||||||||||||||||||
43 | Taxable income. | Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- | . . . . . . | 43 | 21,674 | ||||||||||||||||||||||||||||||
44 | Tax (see instructions). Check if any tax is from: a | Form(s) 8814 b | Form 4972 c | 44 | 2,319 | ||||||||||||||||||||||||||||||
45 | Alternative minimum tax (see instructions). Attach Form 6251 | . . . . . . . . . . . . . . . . | 45 | 0 | |||||||||||||||||||||||||||||||
46 | Excess advance premium tax credit repayment. Attach Form 8962 | . . . . . . . . . . . . . . . | 46 | ||||||||||||||||||||||||||||||||
• | All others: | 47 | Add lines 44, 45, and 46 |
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47 | 2,319 | |||||||||||||||||||||||||||||
Single or Married filing separately, | 48 | Foreign tax credit. Attach Form 1116 if required | . . . . . . . . | 48 | 0 | ||||||||||||||||||||||||||||||
49 | Credit for child and dependent care expenses. Attach Form 2441 . . . | . | 49 | 0 | |||||||||||||||||||||||||||||||
$6,350 | 50 | Education credits from Form 8863, line 19 | . . . . . . . . . . | 50 | |||||||||||||||||||||||||||||||
Married filing jointly or qualifying widow(er) | 51 | Retirement savings contributions credit. Attach Form 8880. | . . . | 51 | |||||||||||||||||||||||||||||||
52 | Child tax credit. Attach Schedule 8812, if required | . . . . . . . . | 52 | 0 | |||||||||||||||||||||||||||||||
$12,700 | 53 | Residential energy credits. Attach Form 5695 | . . . . . . . . . . | 53 | |||||||||||||||||||||||||||||||
Head of household | 54 | Other credits from Form: a | 3800 b | 8801 c | 54 | ||||||||||||||||||||||||||||||
55 | Add lines 48 through 54. | These are your total credits . . . . . . . . . . . . . . . . . . . . . | 55 | 0 | |||||||||||||||||||||||||||||||
$9,350 | 56 | Subtract line 55 from line 47. If line 55 is more than line 47, enter -0 - | . . . . . . . . . . . . |
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56 | 2,319 | |||||||||||||||||||||||||||||
57 | Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 57 | 0 |
Payments | 64 | Federal income tax withheld from Forms W-2 and 1099 | . . . . . . | 64 | 4,700 |
Refund | 75 | If line 74 is more than line 63, subtract line 63 from line 74. | This is the amount you overpaid | 75 | 2,381 | |||||||||||||||||||||||||||||
Direct deposit? | 76 | a | Amount of line 75 you want refunded to you. | If Form 8888 is attached, check here |
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76a | 2,381 |