Based on the following information, prepare the 2015 income tax return Show all calculations for amounts entered on all forms to receive credit Background Information Tony A Johnston(SSN 041 51 5635, Age 50) Kristi J Johnston (SSN 041 45 6123, Age 45), file a joint return for 2015 Tony is employed as an architect, and Kristi is employed as a nurse Details from their respective W 2s are shown below They claim their 11 year old daughter, Stacey (044 90 2132) as their only dependent Address 88Main Street West Haven, CT06516 In order to allow them both to work, the Johnstons paid Sharon Smith (Kristi s mother, SSN 040 72 1532) $5,000 during the year for after school childcare Sharon lives down the street at 52 Main Street, West Haven, CT 06516 During 2015, the Peters purchased an additional property in Litchfield, CT used solely for rental purposes The cost of the multi family residence was $300,000 of which $50,000 is allocated to land, and additionally $30,000 worth of appliances for the property All additional expenses related to this residential rental property are listed below The property was rented beginning on July 1, 2015 with total rental income equaling $25,000 for the year The property is being depreciated over 27 5 year (330 months) Address 117 State Street Litchfield, CT06759 Expenses related to rental property Cleaning and Maintenance $300 Commissions (1) 4,000 Insurance 700 Mortgage Interest 4,250 Real estate taxes 2,700 Repairs 115 Utilities paid by owner 1,100 Paid to leasing company to help them identify and screen potential tenants, collect rents, and schedule necessary repairs and cleaning services Additional Information The Peters also have receipts for the following income and expenses during the year Income City of West Haven bond interest $4,500 Key Bank CD interest 20,925 TD Bank interest 25,438 Expenses Home mortgage interest (Main Home West Haven, CT ) $15,000 Real estate taxes (Main Home West Haven, CT) 11,500 Cash contributions to qualified charity 7,775 Noncash contributions to qualified charity 130 Amount paid when filing their 2014 CT tax return in April of 2015 7,500 Property taxes on both vehicles owned 950 Tax preparation fees 325 The Peters get full health coverage thru Tony s employer The Johnstons did not have any interest in a foreign account or trust They sign their return on April 15, 2016 and decided not to contribute to the Presidential Election Campaign Tony Kristi Gross State Income Tax Withheld Wages $225,000 $11,250 $70,000 $3,500 Federal Income Tax Withheld $56,250 $16,000 Social Security Tax Withheld $7,347 $4,340 Medicare Tax Withheld $3,263 $1,015

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jan 03, 2019

Based on the following information, prepare the 2015 income tax return. Show all calculations for amounts entered on all forms to receive credit. Background Information:

Based on the following information, prepare the 2015 income tax return. Show all calculations for amounts entered on all forms to receive credit.

Background Information:

Tony A. Johnston(SSN 041-51-5635, Age 50) & Kristi J. Johnston (SSN 041-45-6123, Age 45), file a joint return for 2015. Tony is employed as an architect, and Kristi is employed as a nurse. Details from their respective W-2s are shown below. They claim their 11 year old daughter, Stacey (044-90-2132) as their only dependent.

Address: 88Main Street West Haven, CT06516

In order to allow them both to work, the Johnstons paid Sharon Smith (Kristi?s mother, SSN 040-72-1532) $5,000 during the year for after-school childcare. Sharon lives down the street at 52 Main Street, West Haven, CT 06516.

During 2015, the Peters purchased an additional property in Litchfield, CT used solely for rental purposes. The cost of the multi family residence was $300,000 of which $50,000 is allocated to land, and additionally $30,000 worth of appliances for the property.All additional expenses related to this residential rental property are listed below. The property was rented beginning on July 1, 2015 with total rental income equaling $25,000 for the year.The property is being depreciated over 27.5 year (330 months).

Address: 117 State Street Litchfield, CT06759

Expenses related to rental property:

Cleaning and Maintenance	$300
Commissions ⁽¹⁾	4,000
Insurance	700
Mortgage Interest	4,250
Real estate taxes	2,700
Repairs	115
Utilities paid by owner	1,100

Paid to leasing company to help them identify and screen potential tenants, collect rents, and schedule necessary repairs and cleaning services.

Additional Information:

The Peters also have receipts for the following income and expenses during the year.

Income:

City of West Haven bond interest	$4,500
Key Bank CD interest	20,925
TD Bank interest	25,438

Expenses:

Home mortgage interest (Main Home-West Haven, CT )	$15,000
Real estate taxes (Main Home-West Haven, CT)	11,500
Cash contributions to qualified charity	7,775
Noncash contributions to qualified charity	130
Amount paid when filing their 2014 CT tax return in April of 2015	7,500
Property taxes on both vehicles owned	950
Tax preparation fees	325

The Peters get full health coverage thru Tony?s employer. The Johnstons did not have any interest in a foreign account or trust. They sign their return on April 15, 2016 and decided not to contribute to the Presidential Election Campaign.