76. Consider the following letter and answer Shady's question. To my friendly student tax preparer: Home Hello, my name is Shady Slim. I understand you are income for the year...whatever that means. It's been a busy year and I'm a busy man, so let me give you the lowdown on my life and you can do your thing. figure out my gross going to help me I was unemployed at the beginning of the year and got $2,000 in unemployment compensation. I later got a job this year. My boss gave me a $5,000 Christmas bonus check on December 22. 1 decided to hold on to that check and not cash it until next year, so I won't have to pay taxes on it this year. Pretty smart, huh? My job's pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $400 a year and all the Roca Cola I can drink, although I can't really drink a whole lot. I figure $40 worth this year. as a manager for Roca Cola. I earned $55,000 in base salary As part of my manager duties, I get to decide company. My good buddy, Eddie, runs a bottling company. I made sure that he won the bottling contract for Roca Cola for this year (even though his contract wasn't quite the best). Eddie bought me a Corvette this year for being such a good friend. The Corvette cost $50,000 and I'm sure he bought it for me out of the goodness of his heart. What a great guy! on certain things like contracts for the day, I found $8,000 lying Here's a bit of good luck for the year. Upon leaving my office in the street! Well, one person's bad luck is my good luck, right? I like to gamble a lot. I won a $27,000 poker tournament in Las Vegas this year. I also won about $5,000 over the year playing the guys at our Friday night poker game. Can you believe that I didn't lose anything this year? one 1 were leaving the game one Speaking of the guys, one of them hit me with his car as we night. He must have been pretty ticked that he lost! I broke my right leg and my left arm. I sued the guy and got $11,000 for my medical expenses, $3,000 to pay my psychotherapist for the emotional problems I had relating to the injuries (I got really depressed!), and I won $12,000 in punitive damages. That'll teach him that he's not so tough without his car! Another bit of bad luck. My uncle Monty died this year. I really liked the guy, but the $200,000 inheritance I received from him made me feel a little better about the loss. I did the smart thing with the money and invested it in stocks and bonds and socked a little into my savings account. As a result, I received $600 in dividends from the stock, $200 in interest from the municipal bonds, and $300 in interest from my savings account. My ex-wife, Alice, is still paying me alimony. She's a lawyer who divorced me in 2015 because I was "unethical" or something like that. Since she was making so much money and I was unemployed at the time, the judge ruled that she had to pay ME alimony. Isn't that something? She sent me $3,000 in alimony payments this year. She still kind of likes me, though. She sent me a check for $500 as a Christmas gift this year. I didn't get her anything. though. So there you go. That's the year in a nutshell. Can you figure out my gross income and complete page 1 of Form 1040 for me? And since you're a student, this is free, right? Thanks, I owe you one! Let me know if I can get you a six-pack of Roca Cola or something. 2018 Deparmant of the Tesury-nteal Revnue Service U.S. Individual Income Tax Return IRS Use Only-Do not write or staple in this space. 1040 OMB No. 1545-0074 Qualitying widowjer) Head of household Your social security number Maried fing ipintly Married ing separately Sngle Fing status: Last name Your fint name and inital You are blind Your standard deduction Someone can claim you as a dependent ont etum, spoue's frst name and initial You were bom before January 2, 1954 Spouse's social security number Last name Full-year health care coverage or exempt (see inst.) Spouse was bom before January 2, 1954 Spouse standad eduction Someone can claim your spoune as a dependent Spouse ia bind Home address humber and street you have a P0. box, see instrctions Spouse tomies on a sparate retum or you ware dual-stahus alon Presidential Election Campaign (see inst Apt. no. You Spouse If more than four dependents, see inst. and/here town or post office stae and 2P code you have a foreign address aach Schedule Oty Dependents pee instructional Rst e (4)/qualfes for (see instn Child tax credit aonh to you Social security number Oredt for other dependents Last ame Sign Here Under penai of pesury 1d oomct and oplt Dec Your signature aninet ha m and aconpenvee sched and temes and to the best of my knowedge and beliet, they are trun her n tgayeo bed n at omation of which preparer has any knowledge e on af gp Jot w Se nction Dte Your ocoupation the RS sent you an identity Protection PIN enter hare ee inst tthe RS sent you an idertiy Protection PN entert here see inst Fim's EN papy tor yor co Spouse's signaurea jot um both must sign Date Spouse's ocoupation Prepae'sne Paid Preparer Use Only Proparer's signatre PTIN Check it Fmis neme Sd Party Designees Self-employed Phone no Fm's addss For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions Car No. 113308 Fom 1040 go18