Professor Patricia (Patty) Pate´ is retired from the PalmSprings Culinary Arts Academy (PSCAA). She is a single taxpayer and is 68 years old. Patty lives at 98 Colander Street, Henderson, NV 89052. Professor Pate´s Social Security number is 565-66-9378.
Patty receives monthly retirement benefits from her PSCAA retirement plan. Earnings and income tax withholding shown on her retirement 2012 Form1099-R are:
Gross distribution and taxable amount...................................$61,200
Federal tax withheld...........................................................7,350
State tax withheld....................................................................0
Patricia owns a rental condo located at 392 Spatula Way, The Lakes, NV 88905. The condo rents for $850 per month and was rented for the entire year. The following are the related expenses for the rental house:
Real estate taxes...........................................................$2,725
Mortgage interest...........................................................7,500
Insurance.......................................................................410
Depreciation (assume fully depreciated) .....................................0
Homeowners' Association dues..........................................1,540
Repairs........................................................................1,300
Gardening....................................................................2,090
The condo was purchased on August 31, 1976. Professor Pate´ handles all rental activities (e.g., rent collection, finding tenants, etc.) herself.
During March 2012, Patricia took a $75,000 distribution from her 401(k) plan. Patricia received only $60,000 because the 401(k) plan administrators withheld $15,000 federal income tax from the distribution. Forty-five days after the distribution, Patricia deposited $50,000 in a rollover IRA, keeping $10,000 of the $60,000 received in order to remodel her kitchen.
Required:
Complete Professor Pate´s federal tax return for 2012. Use Form 1040, Schedule E, Form 8582, and any other appropriate schedule(s) from pages 4-51 through 4-55 to complete this tax return. Do not complete Form 4562 for reporting depreciation. Make realistic assumptions about any missing data.