2A. Dr. George E. Beeper is a single taxpayer. He lives at 45 Mountain View Dr., Apt. 321, Spokane, WA 99210. Dr. Beeper’s Social Security number is 775-88-9531. Dr. Beeper works for the Pine Medical Group, and his earnings and income tax withholding for 2010 are:

Earnings from Pine Medical $116,000 Federal tax withheld 25,000 State tax withheld 0 Dr. Beeper owns a rental house located at 672 Lake Street, Spokane, WA 99212.

The house rents for $1,000 per month and was rented for the entire year. The following are the related expenses for the rental house:

Real estate taxes $ 3,500 Mortgage interest 12,500 Insurance 900 Depreciation (assume fully depreciated) 0 Gardening 1,000 Repairs 600 Maintenance 3,636 The house was purchased on July 5, 1965. Dr. Beeper handles all rental activities

(e.g., rent collection, finding tenants, etc.) himself.

During May 2010, Dr. Beeper transferred $67,000 out of his Section 401(k) plan from a former employer (Elm Medical Group) to an individual retirement account with the Spokane State Bank. The transfer was made directly from the Section 401(k) plan trustee to the bank.

Required: Complete Dr. Beeper’s federal tax return for 2010. Use Form 1040, Schedule E, Form 8582, Schedule M, and any other appropriate schedule(s) from pages 3-53 through 3-58 to complete this tax return. Do not complete Form 4562 for reporting depreciation. Make realistic assumptions about any missing data.