James Dangell (birthdate August 2, 1976) is a single taxpayer. Jim’s earnings and withholdings as the manager of a local casino for 2020 are reported on his Form W-2:

Jim’s other income includes interest on a savings account at Nevada National Bank of $13,700.

Jim pays his ex-spouse, Sarah McLoughlin, $3,900 per month in accordance with their February 12, 2019 divorce decree. When their 12-year-old child (in the ex-wife’s custody) reaches the age of 18, the payments are reduced to $2,800 per month. His exwife’s Social Security number is 554-44-5555.

In 2020, Jim purchased a new car and so he kept track of his sales tax receipts during the year. His actual sales tax paid is $3,650, which exceeds the estimated amount per the IRS tables.
Jim participates in a high-deductible health plan and is eligible to contribute to a health savings account. His HSA earned $75 in 2020.
During the year, Jim paid the following amounts (all of which can be substantiated):

In 2020, Jim inherited over $500,000 from his Uncle Travis that died in 2020. Although Jim invested a large portion, he also contributed $125,000 cash to the newlynamed Travis School of Criminal Justice at the University of Reno. 

Jim also received the following Form 1098:

Required:

Complete Jim’s federal tax return for 2020. Use Form 1040, Schedule 1, Schedule A, Schedule B, and Form 8889 to complete this tax return. Make realistic assumptions about any missing data.

Transcribed Image Text:

b Employer identification number (EIN) 31-1459656 o Employer's name, address, and ZIP code Lucky Ace Casino 700 N. Sierra Street Reno, NV 89503 d Control number a Employee's social security number 555-94-9358 e Employee's first name and initial James Dangell 911 Parr Blvd. Reno, NV 89512 f Employee's address and ZIP code 15 State Employer's state ID number NV Last name Safe, accurate, OMB No. 1545-0008 FAST! Use Form W-2 Wage and Tax Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. Wages, tips, other compensation 192,000.00 3 Social security wages 137,700.00 5 Medicare wages and tips 200,000.00 7 Social security tips Suff. 11 Nonqualified plans 13 y Form amplys plan 14 Other 16 State wages, tips, etc. 17 State income tax efile 2020 The party play 2 Federal income tax withheld 24,500.00 4 Social security tax withheld 8,537.40 6 Medicare tax withheld 2,900.00 8 Allocated tips 10 Dependent care benefits 12a See instructions for box 12 D 8,000.00 1,200.00 12b Visit the IRS website at www.irs.gov/efile 120 12d W 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Department of the Treasury-Internal Revenue Service