11. The following additional information is available for the Dr. Ivan and Irene Incisor family.

The Incisors own a rental beach house in Hawaii. The beach house was rented for the full year during 2010 and was not used by the Incisors during the year. The Incisors were active participants in the management of the rental. Pertinent information about the rental house is as follows:

Address–1237 Pineapple St., Lihue, HI 96766 Net rental income $20,350 Interest 7,800 Taxes 2,400 Utilities 1,825 Maintenance 3,000 The house is fully depreciated so there is no depreciation expense.

In July, Ivan loaned a friend $7,000 so he could buy a car. Ivan’s friend lost his job in 2010 and stopped making payments on the loan. He plans to start making payments again, however, with additional interest as soon as he has new employment.

For the 2010 tax year, on March 15, 2011, Ivan contributed $5,000 to a traditional IRA for himself and $5,000 to a traditional IRA for his wife. He is not covered by a qualified retirement plan at work.

Irene had a retirement plan at the job from which she was laid off in November 2009.

The plan had a balance of $24,000. On May 10, 2010, Irene had the entire retirement plan balance rolled directly into an IRA at Timador & Embaucar Brokerage, Inc.

Required: Combine this new information about the Incisor family with the information from Chapters 1–2 and complete a revised 2010 tax return for Ivan and Irene. Be sure to save your data input files since this case will be expanded with more tax information in later chapters. A statement is required to be attached to the return for a nonbusiness bad debt, but this requirement may be ignored for this problem.