A. Bea Jones (birthdate March 27, 1984) moved from Texas to Florida in December 2017. She lives

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A. Bea Jones (birthdate March 27, 1984) moved from Texas to Florida in December 2017. She lives at 654 Ocean Way, Gulfport, FL 33707. Bea’s Social Security number is 466-78-7359 and she is single. Her earnings and income tax withholding for 2018 for her job as a manager at a Florida shrimp-processing plant are: 

Earnings from the Gulf Shrimp Co..............$43,200 

Federal income tax withheld.............4,600 

State income tax withheld..............0

Bea’s other income includes interest on a savings account at Beach National Bank of $2,200 and $600 per month alimony from her ex-husband in accordance with their 2010 divorce decree. 

Bea’s employer operates a 401(k) plan, and although she is eligible, Bea does not participate. During 2018, Bea paid the following amounts (all of which can be substantiated): 

Home mortgage interest................$8,700 

Auto loan interest................2,300 

State sales tax................820 

Property taxes on personal residence................3,233 Unreimbursed hospital bills................3,250 

Doctor bills................2,612 

Other deductible medical expenses................720 

Income tax preparation fee................600 

Job-hunting expenses................925 

Contribution to IRA................2,500


In September 2018, Tropical Storm Yuri struck Gulfport and a tree fell on Bea’s home. Bea acquired the home in February 2011 for $110,000. The estimated loss in market value from damage was equal to her repair charge of $7,800. The damage caused by TS Yuri was declared a federal disaster (code EM-1212). Bea’s deductible was quite high and her insurance company only reimbursed her $1,200. 

Required: 

Complete Bea’s federal tax return for 2018. Use Form 1040, Schedule A, Schedule B, and Form 4684 (if needed) to complete this tax return. Make realistic assumptions about any missing data. 

B. John Fuji (birthdate June 6, 1980) moved from California to Washington in December 2017. His earnings and income tax withholding for 2018 for his job as a manager at a Washington apple-processing plant are: 

a Employee's social security number 571-78-5974 Safe, accurate, FASTI Use Visit the IRS website at www.irs.govlefile RS


John’s other income includes interest on a Certificate of Deposit reported on a Form 1099-INT:

CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal cod


Also, in accordance with the 2012 divorce decree he paid $500 per month alimony to his ex-wife (Dora Fuji, Social Security number 573-79-6075). John received the following Form 1098 reporting mortgage interest and property taxes: 


During 2018, John paid the following amounts (all of which can be substantiated):

Auto loan interest................1,575 

Credit card interest................655 

State sales tax................1,285 

Assisted living charges for Gala................5,250 

Doctor bills................2,550 

Other deductible medical expenses................760 

Income tax preparation fee................500 

Job-hunting expenses................925 

Cash charitable donation to the Jonagold Research Center ................400

John’s employer offers a retirement plan, but John does not participate. Instead, he made a $4,000 contribution to a Roth IRA. John also provides 100 percent of the support for his mother, Gala Fuji (Social Security number 323-11-4455). Gala is chronically ill and lives in an assisted living facility in Yakima. Her only income is interest of about $400 on a modest savings account. 

Required: 

Complete John’s federal tax return for 2018. Use Form 1040, Schedule 1, and Schedule A to complete this tax return. Make realistic assumptions about any missing data.

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Related Book For  book-img-for-question

Income Tax Fundamentals 2019

ISBN: 9781337703062

37th Edition

Authors: Gerald E. Whittenburg, Steven Gill

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