1. Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a stay-at-home parent and Walt is a high school teacher. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Neither are age 65 or older. The Blacks provide all the support for Skylar's mother, Rebecca Backin (Social Security number 411-66-2121), who lives in a nursing home in Reno, NV, and has no income. Walter's father, Alton Black (Social Security number 343-22-8899), lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $7,600 in 2021, the Blacks provide over half of Alton's support. Skylar and Walt claim a $500 other dependent credit each for Rebecca and Alton. Walt's earnings from teaching are: Form 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. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2021. They originally paid $75,000 for the home on July 3, 1996, but managed to sell it for $598,000. They spent $14,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home. -64 Chapter 4 - Additional Income and the Qualified Business Income Deduction The Blacks received the following 1099-DIV from their mutual fund investments: The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2021 and used by the Blacks for 16 days. The rental activity does not rise to the level to qualify for the QBI deduction. Pertinent information about the condo rental is as follows: The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo. The Blacks received a \$5,600 EIP in 2021. Required: Complete the Black's federal tax return for 2021. Use Form 1040, Schedule 1, Schedule D, Form 8949 , Schedule E (page 1 only), Form 8582 (page 1 only) and the Qualified Dividends and Capital Gain Tax Worksheet to complete their tax return. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) CheckonlyIfyoucheckedtheMFSbox,enterthenameofyourspouse.IfyoucheckedtheHOHorQWbox,enterthechildsnameifthequalifyingonebox.personisachildbutnotyourdependent person is a child but not your dependent Page 4 of 12 Form 1040(2021) \begin{tabular}{ll|l|l|l|l|l|l|l|l} Third Party \\ Designee & Do you want to allow another person to discuss this return with the IRS? See instructions Designee's name \\ \hline Sign \end{tabular} 16 Combine lines 7 and 15 and enter the result Then, go to line 17 below. - If line 16 is a loss, skip lines 17 through 20 below. Then, go to line 21 . Also be sure to complete line 22. - If line 16 is zero, skip lines 17 through 21 below and enter-0-on Form 1040, 1040-SR, or 1040-NR, line 7. Then, go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21 , and go to line 22 . 18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 20 Are lines 18 and 19 both zero or blank and are you not filing Form 4952 ? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Form 1040, 1040-SR, or 1040-NR, line 7, the smaller of: -Thelossonline16;or-($3,000),orifmarriedfilingseparately,($1,500)} Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, 1040-SR, or 1040-NR, line 3 a? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Before you check Box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949 , page 1 , for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, at adjustment in column (g) to correct the basis. See Column (g) in the separate For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z Form 8949(2021) broker and may even tell you which box to check. Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long-term (see instructions). For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 8 ; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. Form 8949 (2021) Part I Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C. See instructions. If you are an individual, report tarm rental income or loss from Form 4835 on page 2, line 40. A Did you make any payments in 2021 that would require you to file Form(s) 1099 ? See instructions B If "Yes," did you or will you file required Form(s) 1099 ? of 12 Solutions for Questions and Problems - Chapter 4 421 (a) $54,500W2+$1,414 Dividends +$15,700 Sched D 4-22 Chapter 4-Additional Income and the Qualified Business Income Deduction Comprehensive Problem 1, cont. Qualified Dividends and Capital Gain Tax Worksheet-Line 16 Keep for Your Records Before you begin: Seetheearlierinstructionsforline16toseeifyoucanusethisworksheettofigureyourtax. lecked the box 0 02,7072,707 4,741 2,707 1. Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a stay-at-home parent and Walt is a high school teacher. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Neither are age 65 or older. The Blacks provide all the support for Skylar's mother, Rebecca Backin (Social Security number 411-66-2121), who lives in a nursing home in Reno, NV, and has no income. Walter's father, Alton Black (Social Security number 343-22-8899), lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $7,600 in 2021, the Blacks provide over half of Alton's support. Skylar and Walt claim a $500 other dependent credit each for Rebecca and Alton. Walt's earnings from teaching are: Form 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. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2021. They originally paid $75,000 for the home on July 3, 1996, but managed to sell it for $598,000. They spent $14,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home. -64 Chapter 4 - Additional Income and the Qualified Business Income Deduction The Blacks received the following 1099-DIV from their mutual fund investments: The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2021 and used by the Blacks for 16 days. The rental activity does not rise to the level to qualify for the QBI deduction. Pertinent information about the condo rental is as follows: The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo. The Blacks received a \$5,600 EIP in 2021. Required: Complete the Black's federal tax return for 2021. Use Form 1040, Schedule 1, Schedule D, Form 8949 , Schedule E (page 1 only), Form 8582 (page 1 only) and the Qualified Dividends and Capital Gain Tax Worksheet to complete their tax return. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) CheckonlyIfyoucheckedtheMFSbox,enterthenameofyourspouse.IfyoucheckedtheHOHorQWbox,enterthechildsnameifthequalifyingonebox.personisachildbutnotyourdependent person is a child but not your dependent Page 4 of 12 Form 1040(2021) \begin{tabular}{ll|l|l|l|l|l|l|l|l} Third Party \\ Designee & Do you want to allow another person to discuss this return with the IRS? See instructions Designee's name \\ \hline Sign \end{tabular} 16 Combine lines 7 and 15 and enter the result Then, go to line 17 below. - If line 16 is a loss, skip lines 17 through 20 below. Then, go to line 21 . Also be sure to complete line 22. - If line 16 is zero, skip lines 17 through 21 below and enter-0-on Form 1040, 1040-SR, or 1040-NR, line 7. Then, go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21 , and go to line 22 . 18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 20 Are lines 18 and 19 both zero or blank and are you not filing Form 4952 ? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Form 1040, 1040-SR, or 1040-NR, line 7, the smaller of: -Thelossonline16;or-($3,000),orifmarriedfilingseparately,($1,500)} Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, 1040-SR, or 1040-NR, line 3 a? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Before you check Box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949 , page 1 , for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, at adjustment in column (g) to correct the basis. See Column (g) in the separate For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z Form 8949(2021) broker and may even tell you which box to check. Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long-term (see instructions). For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 8 ; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. Form 8949 (2021) Part I Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C. See instructions. If you are an individual, report tarm rental income or loss from Form 4835 on page 2, line 40. A Did you make any payments in 2021 that would require you to file Form(s) 1099 ? See instructions B If "Yes," did you or will you file required Form(s) 1099 ? of 12 Solutions for Questions and Problems - Chapter 4 421 (a) $54,500W2+$1,414 Dividends +$15,700 Sched D 4-22 Chapter 4-Additional Income and the Qualified Business Income Deduction Comprehensive Problem 1, cont. Qualified Dividends and Capital Gain Tax Worksheet-Line 16 Keep for Your Records Before you begin: Seetheearlierinstructionsforline16toseeifyoucanusethisworksheettofigureyourtax. lecked the box 0 02,7072,707 4,741 2,707