I:13-68 Julie Hernandez is single and has no dependents. She operates a dairy farm and her Social Security number is 000-00-1111. She lives at 1325 Vermont Street in Costa, Florida, 44215. Consider the following information for the current year:

• Schedule C was prepared by her accountant and the net profit from the dairy operations is $48,000.

• Itemized deductions amount to $4,185.

• Dividend income (qualified dividend) amounts to $280. She had no transactions involving virtual currency during the year.

• State income tax refund received during the year is $125. She did not itemize last year.

• In June, a burglar broke into her house and stole the following two assets, which were acquired in 1989:

Basis FMV Insurance Proceeds Received Painting $2,000 $10,000 $9,000 Sculpture 1,700 1,500 0 The following assets used in her business were sold during the year:

Acquisition Date Original Cost Depreciation to Date of Sale Date of Sale Selling Price Tractor June 10, 2011 $25,000 $25,000 Oct. 20 $ 8,300 Barn May 23, 2001 90,000 61,000 May 13 87,000 Land May 23, 2001 15,000 –0– May 13 27,000 Cows Sept. 7, 2019 20,000 13,000 Nov. 8 21,000 In August, three acres of the farm were taken by the state under the right of eminent domain for the purpose of building a highway. The basis of the three acres is $1,500, and the state paid the FMV, $22,000, on February 10. The farm was purchased on August 12, 1988.

Nonrecaptured net Section 1231 losses from the five most recent tax years preceding the current year amount to $7,000. Estimated taxes paid during the year amount to

$32,000.

Prepare Forms 1040, 4684 Section A, 4797, and Schedule D. (Do not consider the alternative minimum tax or self-employment taxes discussed in Chapter I:14.)