1. Carol Harris, Ph.D, CPA, is a single taxpayer and she lives at 674 Yankee Street, Durham, NC 27409. Her Social Security number is 793-52-4335. Carol is an Associate Professor of Accounting at a local college. Carol’s earnings and withholding from the college for 2010 are:

Earnings from the college $54,000 Federal income tax withheld 8,800 State income tax withheld 2,500 FICA tax of $3,348 and Medicare tax of $783 were also withheld from Carol’s earnings.

Carol’s other income includes interest of $145 from a savings account at New England Bank and $450 of qualified dividends from Microsoft.

During the year, Carol paid the following amounts (all of which can be substantiated):

Carol drove her car 20,000 miles in total, of which 5,000 miles were for commuting.
Carol made 2010 estimated tax payments to the U.S. Treasury of $3,000 for each quarter.
Required: Complete Carol’s federal tax return for 2010. Use Form 1040, Schedule A, Schedule C, Schedule D, Schedule SE, Schedule M, and the worksheet on pages 9-49 through 9-60 to complete this tax return. Make realistic assumptions about any missing data.

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Home mortgage interest Visa card interest Auto insurance Property taxes on personal residence Other medical expenses Charitable contributions (in cash) Carol had the following stock market transactions: $6,300 350 750 2,650 810 1,000 Stock Acquired Sold Price Basis Trout Co. 04/05/03 10/15/10 $6,000 $3,600 Bass Co. 02/01/10 08/03/10 $7,000 $5,500 Shark Co. 09/12/04 10/15/10 $7,000 $8,500 In addition to being a professor at the local college, Carol maintains a CPA prac- tice. Income and expenses from this activity are: Fees from CPA practice $38,800 Office rent 3,600 Supplies 750 Computer tax service 1,200 Mileage (4,600 miles) 2,300 Client meals and entertainment 2,740 Telephone 975 Other expenses 1,400