1) PREPARE the 2019 1040 TAX RETURN for Juan and Isabella Rodriguez. 2) Second Page: Attach WORKSHEETS listed in items 7, 8, 9, and 10 below. a. Third: Attach all Tax Return Forms in the following order: i. 1040 Page 1 and 2, ii. Schedules 1,2,3 ii. All Schedules with letters in sequence (e.g. Schedule A, B, C, D, E, SE ) iv. All numbered schedules in order: (For Example Schedules 4562, 4797, 8283, 8995) 3) You can find the forms on i-Learn under the section "Forms". 4) After you have completed the netting process for the sale of each asset in item 10 below, you will have the 4 columns remaining below. Complete the following worksheet on the Excel Spreadsheet in a similar manner to the other tax returns you have completed: Total Income Ordinary Income LTCG 25% LTCG 0/15/20% Da te on 5) You must calculate the appropriate amounts of depreciation for each asset and put them in the appropriate forms. Please complete the following chart for each asset: Asset Date Deprecia Cost Show Depreciat Descripti holdi ble Basis Recov your ion ng Sol ery calculation Amount perio d Period of for each d for Depreciati begin each Asset EG. Rental house asset on: S 6) For each asset that was sold please complete the following table. Remember on the sale of the car, the gain or loss is calculated separately for the personal portion and for the business portion. Asset 1 Asset 2 Amount Realized Basis Dear yr 1 Depr yr 2 Depr yr. 3 Less Accumulated Depr Adjusted Basis Realized Gain (Loss) Recognized Gain (Loss) Character of Gain or Loss : Capital, 1245, 1250 or 1231 7) Complete the following table for each asset and show the netting process. After you have complete the netting process below you can insert the results into your excel spreadsheet in item 7. Date Date Calculation Ordinary LTCG LTCG STCG 1231 holding of Income 25% 0/15/20% Gain/Loss period Sale begins Asset 1 8) If you don't know how to treat a particular issue, go to IRS. Gov and search Publications to find the appropriate topic, or Google the question (make sure you find a source that you can trust such as the IRS.) 9) Assume Juan used the 12 year convention for personal property in all prior years. 10) Unless otherwise stated, Juan wants to take the maximum depreciation possible. 11) Additional Rule: Special 25% Gain Netting Rules: Where there is a 1231 gain from real estate and that gain includes both potential 25% gain and potential 0/15/20%, any 1231 loss from disposition of other 1231 assets first offsets the 0/15/20% portion of the 1231 gain and then offsets the 25% gain portion of the 1231 gain. 12) Remember that on the sale of the car, you must split the gain or loss between the business portion and the personal portion. Juan Rodriguez (born 04/01/1980, SS 565 11-1111) is a self-employed certified financial planner. His wife, Isabella Rodriguez (born 03/1/1983, SS 565-33-3333) is a part-time optician who works at Spectacles Eyewear, Oakland, Ca. They live at 1300 Rose Avenue, Oakland, Ca. 94444. The Rodriguezes received the following W-2 and 1099 Forms. They have one daughter, Rosa Rodriguez (born 08/14/2010, 565-44-4444) who lives at home with them. 22222 a Employee's social security number For Official Use Only Void 565-33-3333 OMB No. 1545-0008 b Employer identification number (EIN) 1 Wages, tips, other compensation 99999999999999999999 $40,312.00 c Employer's name, address, and ZIP code 3 Social security wages Spectacle Eyeware $40,312.00 3900 McArthur Avenue 4152201311 5 Medicare wages and tips $40,312.00 Oakland 94618 Country 7 Social security tips ca # d Control number 9 2 Federal income tax withheld $5,132.00 4 Social security tax withheld $2,499.00 6 Medicare tax withheld $584.00 8 Allocated tips # 10 Dependent care benefits # 12a See instructions for box 12 Last name Suff. 11 Nonqualified plans e Employee's first name and initial Isabella 1300 Rose Avenue Rodriguez 13 story employee Fetirement Phone Num # 12b Third party sickly plan 14 Other 12c # # # # Oakland ca 94618 United States 12d f Employee's address and ZIP code 15 State Employer's state ID number 33333333333333333333333 20 Locality name 16 State wages, tips, etc. 17 State income tax $40,312.00 $1,353.00 18 Local wages, tips, etc. 19 Local income tax # # ca Form W-2 wage and Tax Statement 2019 Department of the Treasury - Internal Revenue Service For Privacy Act and Paperwork Reduction Copy A For Social Security Administration - Send this entire page with Act Notice, see the separate instructions. Form W-3 to the Social Security Administration; photocopies are not acceptable. Cat. No. 10134D Do Not Cut, Fold, or Staple Forms on This Page 9191 VOID CORRECTED PAYER'S name, street address, cly or town, state or province, country. ZP a Total ordinary dividends or foreign postal code and telephone ne OM NO 1545-0110 SS20 2019 tb Qualified dividonds Dividends and Distributions Costco Corp 1400 Riverside Drive Rivertido, Ca. 94444 PAYER'S TIN $ 3500 Form 1099-DIV 2a Total capital gaindist 2 Unrecap. Soc. 1200 gain $ $ 2e Section 1200 gan 20 Collectibles pangasin RECIPENTS TIN Copy A For Internal Revenue Service Center File with Form 1096. $ $ RECIPENIS name 3 Nondividend distributions 4 Federal income tax withhold $ Isabella Rodriguez Section dividends 6 Investment expenses Stroot address including apt.no) $ $ 7 Foreign tax paid Foru 1300 Rose Avenue City or town, state or province, country, and ZP or foreign pod code $ 9 Cash liquidation distribution 10 Noncach liquidation debution Oakland, Ca 54852 $ FATCA filing 11 Exemptintors dividends 12 Specified private activity bondintors dividends For Privacy Act and Paperwork Reduction Act Notice, see the 2019 General Instructions for Certain Information Returns. Account number struction and TIN 54 O20 15 tetox withhold Cat No. 1 For 1000-DIV Do Not Cut or Separate Forms on This Page www.insgolfoon Department of the Treasury Internal Revenue Service Do Not Cut or Separate Forms on This Page 1 VIL OMB No 1545-0112 LLUCU ICU PAYER'S name, street address, city or town, state or province, country, ZIP Payer's RTN optional) or foreign postal code and telephone no. US Treasury 1 Interest income 2019 Interest Income For 1099-INT Is 2 Early withdrawal penalty Copy1 PAYER STIN RECIPIENT'S TIN S 3 interest on U.S. Savings Bonds and Treas obligations For State Tax Department RECIPIENT'Same $ 1800 4 Federal income tax withheld investment expenses IS $ Foreign tax paid 7 Foreign country or US. S Tax-exempt interest 9 Speedleybord Street address including apl. no) City or town, state de province, country, and ZP or foreign postal code S 10 Market discount $ 11 Bond premium FATCA Things $ requirement 12 Bond premium Treuifione 13 Bond premiun on tarpt bend IS $ 14 Tax-exempt and tax credit 15 State 16 Sateertification no. 17 State tax withheld bond CUSIP Account number instructions Form 1099-INT www.insgow FONT Department of the Treasury - Internal Revenue Service Juan is a certified financial analyst. He is in business for himself. Juan's business is named JR Advisors. Juan had the following income and expenses in his business 230,000 Gross Revenue Expenses: Advertising Janitorial Services Office supplies Business Travel (not including meals) Full cost of Meals while travelling Wages paid to employees Dues to professional CFA organization Health insurance for employee, Stella Health insurance for Juan, Isabella and Rosa Inot eligible for health insurance from Isabella's employer) Internet and phone expense Renewal of CFA license Business License 2,500 2,800 1,300 5,000 800 60,000 500 8,000 10,000 2400 300 400 Additional information related to his business: Juan started his business on 1/1/2017. Before his business started, in early 2016, he hired a business consultant to help him strategize where to located his business, how to obtain clients, and other matters. He paid the consultant $25,000 on November 15, 2016. Juan has one employee. Stella Cheung. He paid her a salary of $60,000. Juan withheld the following taxes from her paychecks: FICA taxes $4590, California taxes of $1500, federal taxes $2000. He also paid the employer's share of FICA taxes. Juan purchased a $6,000 insurance policy for fire and theft, malpractice, and renter's insurance from Allstate Insurance Company. The amount was paid on 4/1/2019. It was a three year policy for the period 6/1/2019 to 5/31/2022. Juan owned a small building at 3100 MacArthur Blvd, Oakland, Ca. 94618 in which his office was located. He purchased it on 4/1/2017 for $700,000 (Land $100,000, Building $600,000) He paid the following expenses related to the building: Interest expense on the building Property Tax on the building Repairs and Maintenance Utilities $25,000 $7,000 $3500 $2000 On December 1, 2017 he added a concrete handicap ramp to his business at a cost of $6000. On 3/25/2019 Juan traded in his old IBM copy machine for a new Canon copy machine. Juan purchased the IBM on 8/1/2017 for $9000. In 2017, he wrote off the entire cost of $9000 cost under Section 179. The vendor of the Canon machine gave him a trade-in value of $3000 on the IBM. The Canon copier cost $12,000. Juan also paid installation costs of $500 and sales tax of $1200 on the Canon. Juan chooses Section 179 to deduct the Canon in 2019. On 2/1/2017 Juan purchased a Dell computer for $5000 for his personal use at home. On 4/7/2018 he bought a replacement computer for his personal use, so he brought the Dell computer to his office to use in his business. At that time the computer had a FMV of $3000. He sold the computer for $800 on 10/8/2019. He used MACRS depreciation and the half-year convention for the computer. On 2/5/2018 he purchased a used 2017 Toyota Camry for $20,000 plus $2000 sales tax. Juan had claimed the maximum depreciation deduction possible in 2018. He sold the Camry on 10/5/2019 for $23,300. He uses the actual method. He drove the following miles: 2018 2019 Business 14,000 8,000 Pleasure 8,000 4,000 On 10/1/2019 Juan purchased a new Toyota 4Runner (over 6000 lbs) for $42,000. He paid $5000 cash and borrowed the remainder. His interest expense is on the 4Runner is listed below. He uses the actual expense method. He drove it the following miles: Business 5000 Pleasure 3000 2019 Total amounts (business and non-business) spent for the car during the year: Camry Determine the amount 800 200 80 1000 4Runner Determine the amount 0 75 0 2000 4,200 400 Category Depreciation Repairs and Maintenance Car Washes Auto Club Dues Insurance Sales Tax on Lexus Delivery and handling fees on 4 Runner Vehicle Registration fee (personal property tax portion of fee) Interest Expense on 4 Runner Loan License Fee Purchased 10-year Extended warranty on Lexus 60 60 500 180 420 4000 180 80 Parking fees when calling on clients Tolls when visiting clients Gas 100 50 1200 400 The Rodriguez's purchased a condo at 1380 Fillmore Street, Unit 1210, San Francisco, Ca. 94132 for $1,000,000 (land $200,000, building $800,000) on 1/1/2018. They. The Rodriguezes are actively involved in managing the property but spend no more than 30 hours a year dealing with the property. Rental Revenue $3500 per month $42,000 Expenses: Property taxes 1.1% x 1,000,000 11,000 Interest Expense_($850,000 30 year loan at 3.75%) 31,000 Insurance 600 Repairs and Maintenance 2,000 Depreciation Determine the depreciation Management Fee 3,500 Condo Association Fees 9,600 On 5/1/2019 the Rodriguezes purchased a new stove for $800 for the rental unit. On 3/1/2017 Isabella's grandmother Lilly died. Isabella inherited Lilly's home at 3130 Kings Way, Sacramento, Ca. 90046. Lilly purchased the house on 1/1/1960 for $80,000. On 3/1/2017 the house was worth $800,000 (Land $300,000, Building $500,000). In 2017 the Rodriguezes began renting it to tenants. They deducted depreciation in 2017 and 2018. In 2019 the Rodriguezes decided to sell the property. In 2019 received rental income of only $2000 before the tenants moved out on 1/15/2019. The only expenses for the house in 2019 were: property taxes $1000 and insurance $500. The Rodriguezes sold the property on 2/15/2019 for $1,000,000 (Land 400,000, Building 600,000). They paid a broker's commission of $50,000. In addition, the Rodriguezes had the following information (not included in amounts listed above): Juan travelled to Las Vegas for a two-day course in financial planning. The course itself cost $900. Additionally, his total expenses for the two days were: $150 for airfare, $300 for lodging, $120 for meals for himself, $70 for car rental, $35 for dry-cleaning, $30 for tips, $80 for taking out a potential client to dinner and afterward $150 for seeing a Cirque Du Suleil show. (The expenses are not included in any of the expenses listed above). On 1/3/2019 Isabella's grandfather Morris gave Isabella 100 shares of Dell Corporation stock valued at $16,000. Morris had purchased the stock on 5/5/2018 for $17,000. Isabella sold the stock on 5/3/2019 for $15,125. Other Expenses: The Rodriguezes purchased their personal residence on 3/1/2012 for $1,200,000. They took out a $950,000 mortgage acquisition debt). They paid interest expense of $48,000. They paid property taxes of $13,000. On 9/3/2019, the Rodriguezes donated household furnishings to the Salvation Army. The furniture cost $8,000 on 3/10/ 2010 and had a FMV of $1000 in 2020. Isabella was on the Board of the First Baptist Church. She went on a four day conference in Boston to represent her Church. She left Oakland on Monday 10/7/2019 and returned on Friday 10/11/2019. She incurred the following expenses on the trip. $600 $1250 $50 $450 $1200 Airfare Hotel Tips to valets and bellhops Meals Isabella took 5 days time-off from work for which she was not paid. (Usually paid ($1200 for 5 days) Car Rental in Boston Golfing fees Guided Tour of Boston $250 $100 $80 The Rodriguezes paid the following amounts of estimated tax for 2019. Federal Taxes Paid on: January 15, 2019 California 900 $3500 Description 4th atr, 2018 est tax Paid Ca due for 2018 tax year 1st gtr 2019 est tax April 1, 2019 for 2018 tax year 1500 $2000 1000 $4000 1000 $4000 April 15, 2019 for 2019 tax year June 15, 2019 for 2019 tax year September 15, 2019 for 2019 tax year January 15, 2020 for 2019 for tax year 1000 2nd gtr 2019 est tax 3rd qtr. 2019 est tax 4th qtr. 2019 est tax $4000 1000 $4000 The Rodriguezes overpaid their 2018 Federal taxes by $450. Instead of choosing a refund, they chose to apply the overpayment to their first quarter estimated taxes. 1) PREPARE the 2019 1040 TAX RETURN for Juan and Isabella Rodriguez. 2) Second Page: Attach WORKSHEETS listed in items 7, 8, 9, and 10 below. a. Third: Attach all Tax Return Forms in the following order: i. 1040 Page 1 and 2, ii. Schedules 1,2,3 ii. All Schedules with letters in sequence (e.g. Schedule A, B, C, D, E, SE ) iv. All numbered schedules in order: (For Example Schedules 4562, 4797, 8283, 8995) 3) You can find the forms on i-Learn under the section "Forms". 4) After you have completed the netting process for the sale of each asset in item 10 below, you will have the 4 columns remaining below. Complete the following worksheet on the Excel Spreadsheet in a similar manner to the other tax returns you have completed: Total Income Ordinary Income LTCG 25% LTCG 0/15/20% Da te on 5) You must calculate the appropriate amounts of depreciation for each asset and put them in the appropriate forms. Please complete the following chart for each asset: Asset Date Deprecia Cost Show Depreciat Descripti holdi ble Basis Recov your ion ng Sol ery calculation Amount perio d Period of for each d for Depreciati begin each Asset EG. Rental house asset on: S 6) For each asset that was sold please complete the following table. Remember on the sale of the car, the gain or loss is calculated separately for the personal portion and for the business portion. Asset 1 Asset 2 Amount Realized Basis Dear yr 1 Depr yr 2 Depr yr. 3 Less Accumulated Depr Adjusted Basis Realized Gain (Loss) Recognized Gain (Loss) Character of Gain or Loss : Capital, 1245, 1250 or 1231 7) Complete the following table for each asset and show the netting process. After you have complete the netting process below you can insert the results into your excel spreadsheet in item 7. Date Date Calculation Ordinary LTCG LTCG STCG 1231 holding of Income 25% 0/15/20% Gain/Loss period Sale begins Asset 1 8) If you don't know how to treat a particular issue, go to IRS. Gov and search Publications to find the appropriate topic, or Google the question (make sure you find a source that you can trust such as the IRS.) 9) Assume Juan used the 12 year convention for personal property in all prior years. 10) Unless otherwise stated, Juan wants to take the maximum depreciation possible. 11) Additional Rule: Special 25% Gain Netting Rules: Where there is a 1231 gain from real estate and that gain includes both potential 25% gain and potential 0/15/20%, any 1231 loss from disposition of other 1231 assets first offsets the 0/15/20% portion of the 1231 gain and then offsets the 25% gain portion of the 1231 gain. 12) Remember that on the sale of the car, you must split the gain or loss between the business portion and the personal portion. Juan Rodriguez (born 04/01/1980, SS 565 11-1111) is a self-employed certified financial planner. His wife, Isabella Rodriguez (born 03/1/1983, SS 565-33-3333) is a part-time optician who works at Spectacles Eyewear, Oakland, Ca. They live at 1300 Rose Avenue, Oakland, Ca. 94444. The Rodriguezes received the following W-2 and 1099 Forms. They have one daughter, Rosa Rodriguez (born 08/14/2010, 565-44-4444) who lives at home with them. 22222 a Employee's social security number For Official Use Only Void 565-33-3333 OMB No. 1545-0008 b Employer identification number (EIN) 1 Wages, tips, other compensation 99999999999999999999 $40,312.00 c Employer's name, address, and ZIP code 3 Social security wages Spectacle Eyeware $40,312.00 3900 McArthur Avenue 4152201311 5 Medicare wages and tips $40,312.00 Oakland 94618 Country 7 Social security tips ca # d Control number 9 2 Federal income tax withheld $5,132.00 4 Social security tax withheld $2,499.00 6 Medicare tax withheld $584.00 8 Allocated tips # 10 Dependent care benefits # 12a See instructions for box 12 Last name Suff. 11 Nonqualified plans e Employee's first name and initial Isabella 1300 Rose Avenue Rodriguez 13 story employee Fetirement Phone Num # 12b Third party sickly plan 14 Other 12c # # # # Oakland ca 94618 United States 12d f Employee's address and ZIP code 15 State Employer's state ID number 33333333333333333333333 20 Locality name 16 State wages, tips, etc. 17 State income tax $40,312.00 $1,353.00 18 Local wages, tips, etc. 19 Local income tax # # ca Form W-2 wage and Tax Statement 2019 Department of the Treasury - Internal Revenue Service For Privacy Act and Paperwork Reduction Copy A For Social Security Administration - Send this entire page with Act Notice, see the separate instructions. Form W-3 to the Social Security Administration; photocopies are not acceptable. Cat. No. 10134D Do Not Cut, Fold, or Staple Forms on This Page 9191 VOID CORRECTED PAYER'S name, street address, cly or town, state or province, country. ZP a Total ordinary dividends or foreign postal code and telephone ne OM NO 1545-0110 SS20 2019 tb Qualified dividonds Dividends and Distributions Costco Corp 1400 Riverside Drive Rivertido, Ca. 94444 PAYER'S TIN $ 3500 Form 1099-DIV 2a Total capital gaindist 2 Unrecap. Soc. 1200 gain $ $ 2e Section 1200 gan 20 Collectibles pangasin RECIPENTS TIN Copy A For Internal Revenue Service Center File with Form 1096. $ $ RECIPENIS name 3 Nondividend distributions 4 Federal income tax withhold $ Isabella Rodriguez Section dividends 6 Investment expenses Stroot address including apt.no) $ $ 7 Foreign tax paid Foru 1300 Rose Avenue City or town, state or province, country, and ZP or foreign pod code $ 9 Cash liquidation distribution 10 Noncach liquidation debution Oakland, Ca 54852 $ FATCA filing 11 Exemptintors dividends 12 Specified private activity bondintors dividends For Privacy Act and Paperwork Reduction Act Notice, see the 2019 General Instructions for Certain Information Returns. Account number struction and TIN 54 O20 15 tetox withhold Cat No. 1 For 1000-DIV Do Not Cut or Separate Forms on This Page www.insgolfoon Department of the Treasury Internal Revenue Service Do Not Cut or Separate Forms on This Page 1 VIL OMB No 1545-0112 LLUCU ICU PAYER'S name, street address, city or town, state or province, country, ZIP Payer's RTN optional) or foreign postal code and telephone no. US Treasury 1 Interest income 2019 Interest Income For 1099-INT Is 2 Early withdrawal penalty Copy1 PAYER STIN RECIPIENT'S TIN S 3 interest on U.S. Savings Bonds and Treas obligations For State Tax Department RECIPIENT'Same $ 1800 4 Federal income tax withheld investment expenses IS $ Foreign tax paid 7 Foreign country or US. S Tax-exempt interest 9 Speedleybord Street address including apl. no) City or town, state de province, country, and ZP or foreign postal code S 10 Market discount $ 11 Bond premium FATCA Things $ requirement 12 Bond premium Treuifione 13 Bond premiun on tarpt bend IS $ 14 Tax-exempt and tax credit 15 State 16 Sateertification no. 17 State tax withheld bond CUSIP Account number instructions Form 1099-INT www.insgow FONT Department of the Treasury - Internal Revenue Service Juan is a certified financial analyst. He is in business for himself. Juan's business is named JR Advisors. Juan had the following income and expenses in his business 230,000 Gross Revenue Expenses: Advertising Janitorial Services Office supplies Business Travel (not including meals) Full cost of Meals while travelling Wages paid to employees Dues to professional CFA organization Health insurance for employee, Stella Health insurance for Juan, Isabella and Rosa Inot eligible for health insurance from Isabella's employer) Internet and phone expense Renewal of CFA license Business License 2,500 2,800 1,300 5,000 800 60,000 500 8,000 10,000 2400 300 400 Additional information related to his business: Juan started his business on 1/1/2017. Before his business started, in early 2016, he hired a business consultant to help him strategize where to located his business, how to obtain clients, and other matters. He paid the consultant $25,000 on November 15, 2016. Juan has one employee. Stella Cheung. He paid her a salary of $60,000. Juan withheld the following taxes from her paychecks: FICA taxes $4590, California taxes of $1500, federal taxes $2000. He also paid the employer's share of FICA taxes. Juan purchased a $6,000 insurance policy for fire and theft, malpractice, and renter's insurance from Allstate Insurance Company. The amount was paid on 4/1/2019. It was a three year policy for the period 6/1/2019 to 5/31/2022. Juan owned a small building at 3100 MacArthur Blvd, Oakland, Ca. 94618 in which his office was located. He purchased it on 4/1/2017 for $700,000 (Land $100,000, Building $600,000) He paid the following expenses related to the building: Interest expense on the building Property Tax on the building Repairs and Maintenance Utilities $25,000 $7,000 $3500 $2000 On December 1, 2017 he added a concrete handicap ramp to his business at a cost of $6000. On 3/25/2019 Juan traded in his old IBM copy machine for a new Canon copy machine. Juan purchased the IBM on 8/1/2017 for $9000. In 2017, he wrote off the entire cost of $9000 cost under Section 179. The vendor of the Canon machine gave him a trade-in value of $3000 on the IBM. The Canon copier cost $12,000. Juan also paid installation costs of $500 and sales tax of $1200 on the Canon. Juan chooses Section 179 to deduct the Canon in 2019. On 2/1/2017 Juan purchased a Dell computer for $5000 for his personal use at home. On 4/7/2018 he bought a replacement computer for his personal use, so he brought the Dell computer to his office to use in his business. At that time the computer had a FMV of $3000. He sold the computer for $800 on 10/8/2019. He used MACRS depreciation and the half-year convention for the computer. On 2/5/2018 he purchased a used 2017 Toyota Camry for $20,000 plus $2000 sales tax. Juan had claimed the maximum depreciation deduction possible in 2018. He sold the Camry on 10/5/2019 for $23,300. He uses the actual method. He drove the following miles: 2018 2019 Business 14,000 8,000 Pleasure 8,000 4,000 On 10/1/2019 Juan purchased a new Toyota 4Runner (over 6000 lbs) for $42,000. He paid $5000 cash and borrowed the remainder. His interest expense is on the 4Runner is listed below. He uses the actual expense method. He drove it the following miles: Business 5000 Pleasure 3000 2019 Total amounts (business and non-business) spent for the car during the year: Camry Determine the amount 800 200 80 1000 4Runner Determine the amount 0 75 0 2000 4,200 400 Category Depreciation Repairs and Maintenance Car Washes Auto Club Dues Insurance Sales Tax on Lexus Delivery and handling fees on 4 Runner Vehicle Registration fee (personal property tax portion of fee) Interest Expense on 4 Runner Loan License Fee Purchased 10-year Extended warranty on Lexus 60 60 500 180 420 4000 180 80 Parking fees when calling on clients Tolls when visiting clients Gas 100 50 1200 400 The Rodriguez's purchased a condo at 1380 Fillmore Street, Unit 1210, San Francisco, Ca. 94132 for $1,000,000 (land $200,000, building $800,000) on 1/1/2018. They. The Rodriguezes are actively involved in managing the property but spend no more than 30 hours a year dealing with the property. Rental Revenue $3500 per month $42,000 Expenses: Property taxes 1.1% x 1,000,000 11,000 Interest Expense_($850,000 30 year loan at 3.75%) 31,000 Insurance 600 Repairs and Maintenance 2,000 Depreciation Determine the depreciation Management Fee 3,500 Condo Association Fees 9,600 On 5/1/2019 the Rodriguezes purchased a new stove for $800 for the rental unit. On 3/1/2017 Isabella's grandmother Lilly died. Isabella inherited Lilly's home at 3130 Kings Way, Sacramento, Ca. 90046. Lilly purchased the house on 1/1/1960 for $80,000. On 3/1/2017 the house was worth $800,000 (Land $300,000, Building $500,000). In 2017 the Rodriguezes began renting it to tenants. They deducted depreciation in 2017 and 2018. In 2019 the Rodriguezes decided to sell the property. In 2019 received rental income of only $2000 before the tenants moved out on 1/15/2019. The only expenses for the house in 2019 were: property taxes $1000 and insurance $500. The Rodriguezes sold the property on 2/15/2019 for $1,000,000 (Land 400,000, Building 600,000). They paid a broker's commission of $50,000. In addition, the Rodriguezes had the following information (not included in amounts listed above): Juan travelled to Las Vegas for a two-day course in financial planning. The course itself cost $900. Additionally, his total expenses for the two days were: $150 for airfare, $300 for lodging, $120 for meals for himself, $70 for car rental, $35 for dry-cleaning, $30 for tips, $80 for taking out a potential client to dinner and afterward $150 for seeing a Cirque Du Suleil show. (The expenses are not included in any of the expenses listed above). On 1/3/2019 Isabella's grandfather Morris gave Isabella 100 shares of Dell Corporation stock valued at $16,000. Morris had purchased the stock on 5/5/2018 for $17,000. Isabella sold the stock on 5/3/2019 for $15,125. Other Expenses: The Rodriguezes purchased their personal residence on 3/1/2012 for $1,200,000. They took out a $950,000 mortgage acquisition debt). They paid interest expense of $48,000. They paid property taxes of $13,000. On 9/3/2019, the Rodriguezes donated household furnishings to the Salvation Army. The furniture cost $8,000 on 3/10/ 2010 and had a FMV of $1000 in 2020. Isabella was on the Board of the First Baptist Church. She went on a four day conference in Boston to represent her Church. She left Oakland on Monday 10/7/2019 and returned on Friday 10/11/2019. She incurred the following expenses on the trip. $600 $1250 $50 $450 $1200 Airfare Hotel Tips to valets and bellhops Meals Isabella took 5 days time-off from work for which she was not paid. (Usually paid ($1200 for 5 days) Car Rental in Boston Golfing fees Guided Tour of Boston $250 $100 $80 The Rodriguezes paid the following amounts of estimated tax for 2019. Federal Taxes Paid on: January 15, 2019 California 900 $3500 Description 4th atr, 2018 est tax Paid Ca due for 2018 tax year 1st gtr 2019 est tax April 1, 2019 for 2018 tax year 1500 $2000 1000 $4000 1000 $4000 April 15, 2019 for 2019 tax year June 15, 2019 for 2019 tax year September 15, 2019 for 2019 tax year January 15, 2020 for 2019 for tax year 1000 2nd gtr 2019 est tax 3rd qtr. 2019 est tax 4th qtr. 2019 est tax $4000 1000 $4000 The Rodriguezes overpaid their 2018 Federal taxes by $450. Instead of choosing a refund, they chose to apply the overpayment to their first quarter estimated taxes