2A. Ray and Maria Gomez have been married 3 years. They live at 1610 Quince Ave., McAllen, TX 78701. Ray works for Palm Oil Corporation and Maria works for the City of McAllen. Maria’s Social Security number is 444-65-9912 and Ray’s is 469-

21-5523. Ray’s and Maria’s earnings and income tax withheld for 2010 are:

Ray: Earnings from Palm Oil Corp. $29,420 Federal income tax withheld 4,320 State income tax withheld 0 Maria: Earnings from the City of McAllen $31,300 Federal income tax withheld 5,300 State income tax withheld 0 Ray and Maria have interest income of $577 from a savings account at McAllen State Bank. In addition, they own U.S. Savings bonds (Series EE). The bonds had a value of $10,000 on January 1, 2010, and their value is $10,700 on December 31, 2010. They have not made an election with respect to these bonds.

Ray has an ex-wife named Judy Gomez. Pursuant to their divorce decree, Ray pays her $400 per month in alimony. All payments were made on time in 2010. Judy’s Social Security number is 566-74-8765.

During 2010, Ray was in the hospital for a successful operation. His health insurance company reimbursed Ray $4,732 for all of his hospital and doctor bills.

In June of 2010, Maria’s father died. Under a life insurance policy owned and paid for by her father, Maria was paid death benefits of $25,000.

Maria bought a Texas lottery ticket on impulse during 2010. Her ticket was lucky and she won $3,000. The winning amount was paid to Maria in November 2010, with no income tax withheld.

Palm Oil Corporation provides Ray with a company car to drive while he is working.

The Corporation spent $5,000 to maintain this vehicle during 2010. Ray never uses the car for personal purposes.

Required: Complete the Gomez’s federal tax return for 2010. Use Form 1040 and Schedule M on pages 2-47 through 2-49. Make realistic assumptions about any missing data.