Albert Gaxtac and his wife Allison are married and file a joint return for 2020. The Gaxtaca live at 12340 Cocoshell Road, Coral Gables, FL 33134. Captain Gaxter is a charter fishing boat captain but took 6 months off from his job in 2020 to train and study for his Masters Captain's License. student at DCCC. Sean and Cayman have a 1-year-old child, Wanda Slacker (Social Security number 648- 99-4306). Sean, Cayman, and Wanda all live in an apartment up the street from Albert and Allison during the entire current calendar year. Sean and Cayman both work for Sean's wealthy grandfather as apprentices in his business. Their wages for the year were a combined $50,000, which allowed them to pay all the personal expenses for themselves and their daughter. The Gaxtarz received a $2,900 EIP in 2020 In 2020, Albert received a Form W-2 from his employer, Coconut Grove Fishing Charters, Inc.: Employee's so 266-51-1966 b Employercation number 60-3456789 Employer's name, address, and ZIP code Coconut Grove Fishing Charters, Inc. 2432 Bay Blvd. Coconut Grove, FL 33133 Sale, scurt Visit the bote at se fileww.goale OMG No 1545-000 FACT Use WAT 2765 rea 67.254.70 5,588.17 Socialry wages 67.254.70 4.169.79 5 Medicare wage and lipe 6 Medicare wild withheld 67.254.70 975.19 7 Socialtype Albert and Allison have a savings account and received the following Form 1099-INT for 2020: CORRECTED (it checked) PAYERS, readily or or province county. ZP Paw's RTN Copende GMB No 164602 or omin postal cod, and telephone Vizcaya National Bank Interest 2020 9871 Coral Way 1 income Income Miami, FL 33134 348.19 Form 1099-INT 2 Early withdrawal perilly Copy B PAYER'S TIN RECIPENTS TIN 60-7654321 266-51-1966 For Recipient 3 interest on U.S. Sering Bonds and Treas, obligations a Controler 10 Dependent care benefits Su 11 Honqualified plane 12a See instructions forbert . Employees frame and in Last name Albert T. Gaytor 12340 Cocoshell Road Coral Gables, FL 33134 13 een N i 14 Ober 120 121 Employee's waitress and ZIP code 15 e Employer's statutube The FL 16 State ages, speet. 17 State income tax 10 Local wage 10 Loome tax 20 Lady 2020 Department of the Treasury-Wemal Revenue Service From W-2 wage and Tax Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Reverse Service RECPENTSnarse with investment expenses This is important tax Albert T. Gaytor information and is being furnished to the 7 Forni Country or US passion IRS. If you are Street roos including at no) required to the Tenterest rotu, a og er 12340 Cocoshell Road Speaked private hond penalty or other sanction may be City or town, or province, country, and ZIP or foreign postal code I$ $ imposed on your 10 Mare discount 11 Bond premium this incones Coral Gables, FL 33134 table and the IRS determines that has FATCA ing $ not been reported 12 Bond runon Tobulion 13 Bundan tas.com bond awy $ Account number (see instructions) 14 Torpand tax credit 15 Se 16 Stateiden rate tax wereld Bond CUSPRO - Form 1099-INT ( (koup for your records) palemoOINT Department of the Treasury Internal Revenue Service Name Social Security Number Date of Birth Albert T. Saxter 266-51-1966 09/22/1970 Albert and Allison also received three Forms 1099 Allison A. Gavtor 266-34-1967 07/01/1971 Crocker Saxter 261-55-1212 12/21/2002 Cayman Slacker 261-11-4444 03/13/2001 Sean Slacker 344-23-5656 05/01/2000 The Gaxtars have a 17-year-old son, Crocker, who is a full-time freshman at Brickell State University. The Gavtors also have an 18-year-old daughter, Cayman, who is a part-time student at Dade County Community College (DCCC). Cayman is married to Sean Slacker, who is 19 years old and a part-time GON 146 CORRECTED (if checked) ) PAYERS na street address.dly or town, state or province country, ZP Paya's Ropeonel , , or foreign powder and telephone Florida Electric Company 100 Palm Boulevard 1 Intencome Jupiter, FL 33458 703.32 $ 2 Early withdrawal penalty 2020 Interest Income Form 1099-INT 2020 Copy B RECIPIENTS TIN PAYERS TIN 59-0247776 1$ intern U.S. Strings Bonds and Treas, option For Recipient 266-51-1966 CORRECTED (if checked) PAYER'Sana address, city rw, or province county 2 Ta Total ordinary dividende ara 13 UTI IN or foreign postal code and telephone no 400.00 Grapefruit Mutual Fund $ Dividends and 1b unified God 1500 S. Orange Blossom Trail Distributions Orlando, FL 32800 360.00 $ Form 1099-DIV 2a Toplul gaindit 2b Unrecap. Soc. 120 gain . . Copy B $ 120.00 $ PAYERS TIN For Recipient RECIPIENTS TIN 2c Section 1202 2 21 Colectibles (2) gain 51-3334433 266-34-1967 $ RECIPIENTS Nondividend distributions Federal home to w Allison Gaytor This is important $ $ 0.00 information and 5 Section 100A dividende www experies being used to Street inding it.no) $ required to the 12340 Cocoshell Rd. 7 Foreign tax paid 8 Fri ve Spor return, once perty or other Sanction may be City or town, state province, country, and ZIP or foreign postal code $ imposed on you Coral Gables, FL 33134 Cash liquidation detribution 10 Necashiquidation disebut this moment and the IRS $ determines that it has FATCA in 11 Exempo dividendo 12 Spoled private activity not been reported requin bondinbeat dividindo $ $ Account number one 19 States 15 Sute tax withheld RECIPIENTS rame Income westment expenses This is important tax Albert T. Gaytor Information and is For ipad 7 being furnished to the T Fongreyer US pomien IRS. If you are Street address (including apt no.) required to the Oompiers 12340 Cocoshell Rd retum, a negligence Spooled private abond penalty or other sanction may be City of own, or province, country, and Poni portal code $ $ imposed on your Coral Gables, FL 33134 10 Modiscount 11 Bond premium this income is long the datormines that it has FATCA $ not been reported que 12 fond newyobro 13 Bodrumband $ Account Internacion 14 Tcerpt and tax credi 15 Stue 18 Sweet 0 17 Stelle wild 16 x bond CUSIPO. $ RS. you Form 1099-INT (koop for your records) () www.in.gov.FOINT Department of the Treasury Internal Revenue Service Form 10.09-DIV (keep for your records) www.in.gov/Form1000W Department of the Treasury Internal Pene Service The Gaytars, also received interest of $800 from bonds issued by the Miami-Dade County Airport Authority (Form 1099 not shown). Albert went to the casino on his birthday and won big, as reflected on the following Form W-2G I CORRECTED checked PAYERS name, adress, cly or town, state or pronon.country. Op - Total ordinary dividenda OMB NO. 1845-0110 , , or foreign postal code, and wephone 1,102.32 Everglades Bank Corporation $ Dividends and 2020 1500 S. Krome Ave. 1. Clified dividende Quid Distributions Homestead, FL 33034 1,102.32 $ Form 1090-DIV 2a Totalpital de 2b Unreon, Sec. 1250 Copy B $ $ $ PAYERS TIN RECIPIENTS TIN For Recipient ad Collectibles Cagain 3e Section 2012 57-4443344 266-34-1967 $ FECERONIS Name Nondividend distributions encome tax W $ Allison Gaytor 0.00 This temportant to information and is 5 Seconde benefited to Street adrese including pt.no) $ the IRS.F you are MA red to the 12340 Cocoshell Road 7 Foreign tax paid 1 for US per return, anglance perly or other action may be City or lon, le province, country and Prin postal code $ imposed on you Coral Gables, FL 33134 o Covidien Chiquito diferencia en etter the one hand determine that has FATCA 11 Erre udende 12 Specified private otty not been reported | requirement bond individendi D $ $ Kocount number ise retruction 114 were 16 tet with $ $ Form 1099-DIV keep for your records) www.in.gov/Fom10000 Department of the Treasury - Internal Revenue Service 2 Date won CORRECTED (f checked PAYERS rore, troetatrons, city or town, province or stats, country, 1 Reportable whining and foreign postal 6,062.00 Mikkosukee Resort and Gaming 1321 Tamiami Hwy Miami, FL 33194 s Transaction CORRECTED (if checked) PAYER nome, street art, clty or town, state or provhon country, DP Unport compensato OMB NO. 1545-0120 or foreign postcode, and honen Florida Dept. of Econ. Opportunity 4.074.76 107 E. Jefferson Blvd. 2020 2 State or local income tax Tallahassee, FL 32399 refund 3 Type of OM NA 1845-03 2020 Form W-2G - Certain Gambling Winnings IRAS Is 1.600.00 Certain Government Payments For 1099-6 RECIPIENTS TIN PAYER'S TIN 21-5556666 RECIPIENTS Allison Gaytor 7 Whoice was $ protone 10 Window 266-51-1966 PAYER'Studera identition number PAYERS telephone number 22-7777777 305-555-1212 11 First D. 3 Box 2 amount is for tax your Feel conte tax with Copy B 150.00 For Recipient SRTAA pats BY THIS is important $ Information and TAGA pays Dr Check box 25 being used to the AS. Ir you are regled $ Inace Wade or busi ione arun, a Megan negligence penalty or on may imposed on your tres 10 tue Stue tato o 11 eirometr womes wit ang the IRS et It has not been reported 12 Second LD This information is being furnished to the Internal Reverse Service WINNERS Albert Gaylor the adrenal) 12340 Cocoshell Road city or town, state or province country and ZIP or foreign postal code Coral Gables, FL 33134 Account Numbruction Form 109-G op for your reco www.smo Department of the Treasury - Rever + Stroet adidas oluding apt. no. 13 S14 winning 12340 Cocoshell Rd DF-124562 Copy B Report this income Gilty or loun, province or state country, and ZP Ford postal code 15 come tax W16 Lockings on your federal tax Coral Gables, FL 33134 return this form shows federal $ $ 17 Local Hoce 18 of locally income tax withheld inbox attach this copy to your retum Une pe of peary, I declare that to the best cry wedge and at the time, and trpayer eftio sumber at have the correctly with me as the mean of the payment and any payments from wes, and tut no other person is to any part of the payments Signature Date Porn W-2G www.gome Department of the Towy-Inverse Service Albert and his family are covered by an employee-sponsored health plan at his work. Coconut Fishing pays $700 per month in premiums for Albert and his family. During the year, Allison was in the hospital for appendix surgery. The bill for the surgery was $10, 100 of which the health insurance reimbursed Albert the full $10,100. Albert had no other gambling income or losses for the year. . Coconut Fishing also pays for Albert's parking at the marina. The monthly cost is $270. On September 1, Allison opened a retail store that specializes in sports car accessories. The name of the store is "Taze Pass." The store is located at 617 Crandon Boulevard, Key Biscayne, FL 33149. The store uses the cash method of accounting for everything except inventory which is kept on an accrual basis. The store's EIN is 98-7321654. Allison purchased inventory in August and then started her business on September 1 with $40,100 of inventory. The Tres Pass accountant provided the following financial information: In February, Allison received $50,000 in life insurance proceeds from the death of her friend, Sharon. In July, Albert's uncle Ivan died and left him real estate (undeveloped land) worth $72,000. Five years ago, Albert and Allison divorced. Albert married Iris, but the marriage did not work out and they divorced a year later. Under the July 1, 2016 divorce decree, Albert pays Iris $11,500 per year in alimony. All payments were on time in 2020 and Iris' Social Security number is 667-34-9224. Three years ago, Albert and Allison were remarried. Coconut Fishing Charters, Inc. pays Albert's captain's license fees and membership dues to the Charter Fisherman's Association. During 2020, Coconut Fishing paid $1,300 for such dues and fees for Albert. Allison was laid off from her job on January 2, 2020. She received a Form 1099-G for unemployment , benefits: Income Statement 64.100 500 637600 Allison drove her 2012 Ford Explorer 1,701 miles for business related to Tees Pass. The Explorer was driven a total of 11,450 miles for the year. Included in the total 11,450 miles is 5,000 miles spent commuting to the store. Allison has the required substantiation for this business mileage. She uses the . standard mileage method. In July, Albert loaned a friend $7,000 so he could buy a car. Albert's friend lost his job in 2020 and stopped making payments on the loan. He plans to start making payments again, however, with additional interest as soon as he has new employment. . In late 2020, Albert started to mount and stuff some of his trophy fish to display in his "man cave" at the Saxtar'a home. Some of his friends liked Albert's taxidermy work and asked him to prepare a couple of trophy fish for them as well. Although he doubts he will ever sell any more stuffed fish, he received $150 and had no expenses related to this activity in 2020. . 40.100 37.886 77.96 37917 40.069 23.631 2.997 Toge Pass Auto Parts Calendar Year 2020 Financial Statements in US Dollars Revenue Gross Sales Loss Sales Returns and Allowances Net Sales Cost of Goods Sold Beginning inventory Add: Purchases Inventory Available Less Ending Inventory Cost of Goods Sold Gross Profit (Loss) Expenses Advertising Dues and Subscriptions Gifts Insurance Interest Legal and Professional Fees Licenses and Fees Miscellaneous Office Expense Payroll Taxes Postage Rent Repairs and Maintenance Supplies Telephone Travel Uniforms Utilities Vehicle Expenses Wagen Total Expenses Net Operating Income Other Income Gain (Loss) on Sale of Assets Interest Income Total Other Income Net Income (Loss) 180 805 1,700 315 900 82 1.266 510 The Gaxtans own a rental beach house in Hawaii. The beach house was rented for the full year during 2020 and was used by the Gaxtara during the year. The Saxta were active participants in the management of the rental house but the activity is not eligible for a QBI deduction. Pertinent information about the rental house is as follows: 7.500 401 630 781 9:40 390 975 Address: 1237 Pineapple St., Lihue, HI 96766 Gross rental income Mortgage interest Real estate taxes Utilities Cleaning Repairs The house is fully depreciated so there is no depreciation expense. $20.000 8,000 2,200 1,400 2,400 650 3.470 23,842 (311 Albert and Allison received the following combined statements 1099-DIV and 1099-B from their investment manager: (310) A review of the expense account detail reveals the following: The travel expense includes the costs Allison incurred to attend a seminar on sports car accessories. She spent $300 on airfare, $400 on lodging, $90 on a rental car, and $150 on meals. Allison has proper receipts for these amounts. The gift account details show that Allison gave a $30 gift to each of her six best suppliers. The supplies expense account detail reflects the purchase of 250 pens with the "Taas. Pass" logo inscribed on each pen. Allison gave the pens away to suppliers, customers, and other business contacts before the end of the year. . Uniforms expense reflects the cost to purchase polo shirts Allison provided for each employee (but not herself). The shirts have the Tees Pass logo printed on the front and back and are the required apparel while working but otherwise are just like any other polo shirts. The license and fee account includes a $600 fine Tags Pass paid to the state of Washington for environmental damage resulting from an oil spill. 2020 Mortgage Interest Statement Fortress Securities PO Box 1300 Gaithersburg, MD 20877 Copy B for Recipient IMPORTANT TAX DOCUMENT 2020 Form 1099-DIV Dividends and Distributions RECIPIENT'S TIN: 266-51-1966 Albert T. Gaytor Allison A Gaytor JT TEN WROS 12340 Cocoshell Rd Coral Gables, FL 33134 Total Capital Ordinary Qualified Gain Unrecap Nondividend Fund Name Dividend Dividends Distrib 1250 Gain Distrib Peach Fund 0.00 0.00 475.00 2020 Form 1099-B Proceeds from Broker and Barter Exchange Transactions CORRECTED if checked) RECIPIENT'S LENCERS sane, street address.city or town, stilor 'Caution: The weat how No. 1150 province, coutry, ZIP or foreign poslod, and phone ne not be fully dede by Limited on the amount and the cost and the Vizcaya National Bank word property may apply. Ns. 9871 Coral Way you need ily. Miami, FL 33134 actually paid by you, and iud by scherpen Fom 1096 Mortgage interest received from peperatorrow $ 11,428.19 RECIPIENTSILENCOR STIN PAYERS_BORROWER'S TIN 3 Mortgage arigration date 2 Outstanding mortges pred 60-7654321 266-51-1966 IS 317,034 44 03/01/2006 Petund of overpaid Mortgage range premi PAYER SVGORROWER'S rare $ Albert and Allison Gaytor Pavis paid on purchase of principal residence $ Street address coding st. 10) 71address of property Secuing mortgage is the same 12340 Cocoshell Road PAYERSBORROWERS address the box i choked, the address or despion is inbox City ortows, state or province, country, and ZIP or foreign postal code , Address or destrption of property securing mortgage me Coral Gables, FL 33134 instruccions Exempe- Fed Tax Interest State Tax Withheld Dividends Withheld 0.00 Copy B For Payer Borrower The information in bo nagid 111 port turimetio da med to the As.I you un nogurad taflar reipuree partynotis section na beiredo you find . to undert ut because you W dediction by l T 2 tiet t the posted in bars and of bechat you to the of tonsbe because you claimed torciddi 11 Montage acquisition date Number of properties in the 10 of Mortgage Descripe Date Ace 100 shs. Orange Co 02/11/2020 100 shs. Banana Co 07/17/2019 100 shs Grape Corp 12/18/2019 5 $1,000 Par Value 12/30/2010 Bonds due 4/2020 5,011.23 shs. Peach 05/30/2011 Mutual Fund Proces $3,000.00 2.100,00 9,050.00 Date Sold 04/16/2020 07/31/2020 09/25/2020 01/02/2020 Cost $2,350.00 4,200.00 10,400.00 Fed Tax Withheld $0.00 0.00 0.00 Account number Proceeds Basis Reported Reported to IRS to IRS Net Yes Net Yes Net Yes For 10 5,100.00 Department of the Treasury-inemal Revenue Service Keep for your records 5,415.00 www.igfontos 0.00 Net Yes Albert and Allison paid the following in 2020 (all by check or can otherwise be substantiated): 10/22/2020 59,750,00 56,000.00 0.00 Net Yes $ 600 6,000 On January 12, 2020, Albert and Allison sold their personal residence for $716,000 and purchased a new house for $725,000. This was their personal residence before and after the divorce (they have lived in it together for three years since remarrying). The old house cost $120,000 back in January of 2008 and they added on a new bedroom and bathroom a few years ago for a cost of $20,000. They also built a pool for a cost of $61,500. They moved into the new house on January 19, 2020. Albert and Allison received the following form: : Contributions to St. Anne's Catholic Church Tuition to St. Anne's Catholic School for Crocker (spring 2020) Clothes to Salvation Army (10 bags in good condition) Contributions to Marcus Rubius Congressional campaign Psychotherapy for Allison Prescription eyeglasses for Crocker Prescription medication and drugs Credit card interest Interest on Albert's college loans Actual state sales tax (including sales tax on new auto of $2,000) Investment interest expense on stock margin account Auto loan interest reported on Form 1098 (not shown here; auto was paid for by a home equity loan on residence) Auto insurance Cosmetic surgery for Albert Dave Deduction, CPA, for preparation of last year's tax return Safe-deposit box for storage of stocks and tax data Contribution to an educational savings account for Crocker Home property taxes Unreimbursed business expense (seminar on dealing with hijacking at sea) 240 250 2,300 413 1,903 1,345 3,125 3,421 345 860 1,600 4,500 765 100 1,000 4,677 700 In August 2020, Crocker was on an out-of-town field trip with the university band and his appendix burst. He required immediate surgery which was considered "out of network for the Gavtors health plan resulting in hospital and doctor's fees of $3,150 not covered by insurance. In addition, Allison drove 310 miles round trip to be with Crocker after the surgery and drove him home after he recovered. She spent two nights in a hotel at a cost of $170 per night. Use a computer software package such as Intuit Pracanaest to complete Form 1040 for Albert and Allison Gavtor for 2020. Be sure to save your data input files since this case will be expanded with more tax information in later chapters. Make assumptions regarding any information not given. In June, Albert purchased a new professional digital SLR camera for $7,950. While the Gaxtare were on vacation in August, someone broke into their residence and stole the camera. Albert's homeowners insurance did not reimburse him for any part of the loss since he declined the special premium add-on for high value items required by his policy. For the 2020 tax year, on April 15, 2021, Albert contributes $6,000 to his traditional IRA and Allison . contributes $6,000 to her traditional IRA. Albert is not covered by a qualified retirement plan at work. Albert managed to gather his gambling loss documentation and can substantiate gambling losses of $4,561 in 2020 (refer back to Chapter 2 for gambling winnings). The Sextana paid tuition and fees for both Crocker and Cayman to attend college. Recall that Crocker is a freshman at Brickell State and Cayman is a part-time student in community college. Crocker received a $1,000 scholarship from Brickell State. Crocker's Form 1098-T is shown below. The Gaxtara paid tuition and fees of $1,400 for Cayman in 2020. CORRECTED Preme, strechy record Power METSA foreign potloodtrub quod in die aperc Brickell State University 4,800.00 Tuition 2020 605 Crandon Blvd Statement Key Biscayne, FL 33149 Form 1098-T PLER Ruang Maraton SOSTIN STUDENTS Copy B 44-3421456 261-55-1212 For Student STUDENTS Adida Scholar This portar Crocker Gaytor ta and is being - y . Ass 10 Yhted the more miched to the Fom 12340 Cocoshell Rd, shirshor bords for a prior year y low state or protect and ZP or foruga pasta code campo defen.com to conductor Coral Gables, FL 33134 March Note Service Provider Acet. Hoe hat Cheesti last CheckedIn gradine 10 inscriererlunda proporto prepare the harmest ludunt Os www.is.govformio Department or the Tury. Intere Perene Service s 1.000.00 ngh sort Form 100B-T In December 2019, Albert's 82 vear-old aunt, Virginia Everglades (Social Security number 699-19-9000), was unable to support herself and moved in with the Santana She lived with them for all of 2020. The Gavtors, provided more than one-half of Aunt Virginia's support. Virginia's only source of income is a small annuity that paid her $3,100 in 2020. While Albert and Allison were working, the Saxtars hired a nanny service from time to time to take care of Aunt Virginia. The Saxtala, paid $3,400 to Nannus R Us in 2020. Nannvs R Us (EIN 34-1234123) is located at 80 SW 22nd Avenue, Miami, FL 33133. On September 14, 2020, Allison purchased the building where her store is located. She paid $375,000 for the building (which includes $100,000 for the land it is located on). Allison's store is the only business in the building. The depreciation on the store needs to be reflected on Schedule C of the business. Albert Gaxtac and his wife Allison are married and file a joint return for 2020. The Gaxtaca live at 12340 Cocoshell Road, Coral Gables, FL 33134. Captain Gaxter is a charter fishing boat captain but took 6 months off from his job in 2020 to train and study for his Masters Captain's License. student at DCCC. Sean and Cayman have a 1-year-old child, Wanda Slacker (Social Security number 648- 99-4306). Sean, Cayman, and Wanda all live in an apartment up the street from Albert and Allison during the entire current calendar year. Sean and Cayman both work for Sean's wealthy grandfather as apprentices in his business. Their wages for the year were a combined $50,000, which allowed them to pay all the personal expenses for themselves and their daughter. The Gaxtarz received a $2,900 EIP in 2020 In 2020, Albert received a Form W-2 from his employer, Coconut Grove Fishing Charters, Inc.: Employee's so 266-51-1966 b Employercation number 60-3456789 Employer's name, address, and ZIP code Coconut Grove Fishing Charters, Inc. 2432 Bay Blvd. Coconut Grove, FL 33133 Sale, scurt Visit the bote at se fileww.goale OMG No 1545-000 FACT Use WAT 2765 rea 67.254.70 5,588.17 Socialry wages 67.254.70 4.169.79 5 Medicare wage and lipe 6 Medicare wild withheld 67.254.70 975.19 7 Socialtype Albert and Allison have a savings account and received the following Form 1099-INT for 2020: CORRECTED (it checked) PAYERS, readily or or province county. ZP Paw's RTN Copende GMB No 164602 or omin postal cod, and telephone Vizcaya National Bank Interest 2020 9871 Coral Way 1 income Income Miami, FL 33134 348.19 Form 1099-INT 2 Early withdrawal perilly Copy B PAYER'S TIN RECIPENTS TIN 60-7654321 266-51-1966 For Recipient 3 interest on U.S. Sering Bonds and Treas, obligations a Controler 10 Dependent care benefits Su 11 Honqualified plane 12a See instructions forbert . Employees frame and in Last name Albert T. Gaytor 12340 Cocoshell Road Coral Gables, FL 33134 13 een N i 14 Ober 120 121 Employee's waitress and ZIP code 15 e Employer's statutube The FL 16 State ages, speet. 17 State income tax 10 Local wage 10 Loome tax 20 Lady 2020 Department of the Treasury-Wemal Revenue Service From W-2 wage and Tax Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Reverse Service RECPENTSnarse with investment expenses This is important tax Albert T. Gaytor information and is being furnished to the 7 Forni Country or US passion IRS. If you are Street roos including at no) required to the Tenterest rotu, a og er 12340 Cocoshell Road Speaked private hond penalty or other sanction may be City or town, or province, country, and ZIP or foreign postal code I$ $ imposed on your 10 Mare discount 11 Bond premium this incones Coral Gables, FL 33134 table and the IRS determines that has FATCA ing $ not been reported 12 Bond runon Tobulion 13 Bundan tas.com bond awy $ Account number (see instructions) 14 Torpand tax credit 15 Se 16 Stateiden rate tax wereld Bond CUSPRO - Form 1099-INT ( (koup for your records) palemoOINT Department of the Treasury Internal Revenue Service Name Social Security Number Date of Birth Albert T. Saxter 266-51-1966 09/22/1970 Albert and Allison also received three Forms 1099 Allison A. Gavtor 266-34-1967 07/01/1971 Crocker Saxter 261-55-1212 12/21/2002 Cayman Slacker 261-11-4444 03/13/2001 Sean Slacker 344-23-5656 05/01/2000 The Gaxtars have a 17-year-old son, Crocker, who is a full-time freshman at Brickell State University. The Gavtors also have an 18-year-old daughter, Cayman, who is a part-time student at Dade County Community College (DCCC). Cayman is married to Sean Slacker, who is 19 years old and a part-time GON 146 CORRECTED (if checked) ) PAYERS na street address.dly or town, state or province country, ZP Paya's Ropeonel , , or foreign powder and telephone Florida Electric Company 100 Palm Boulevard 1 Intencome Jupiter, FL 33458 703.32 $ 2 Early withdrawal penalty 2020 Interest Income Form 1099-INT 2020 Copy B RECIPIENTS TIN PAYERS TIN 59-0247776 1$ intern U.S. Strings Bonds and Treas, option For Recipient 266-51-1966 CORRECTED (if checked) PAYER'Sana address, city rw, or province county 2 Ta Total ordinary dividende ara 13 UTI IN or foreign postal code and telephone no 400.00 Grapefruit Mutual Fund $ Dividends and 1b unified God 1500 S. Orange Blossom Trail Distributions Orlando, FL 32800 360.00 $ Form 1099-DIV 2a Toplul gaindit 2b Unrecap. Soc. 120 gain . . Copy B $ 120.00 $ PAYERS TIN For Recipient RECIPIENTS TIN 2c Section 1202 2 21 Colectibles (2) gain 51-3334433 266-34-1967 $ RECIPIENTS Nondividend distributions Federal home to w Allison Gaytor This is important $ $ 0.00 information and 5 Section 100A dividende www experies being used to Street inding it.no) $ required to the 12340 Cocoshell Rd. 7 Foreign tax paid 8 Fri ve Spor return, once perty or other Sanction may be City or town, state province, country, and ZIP or foreign postal code $ imposed on you Coral Gables, FL 33134 Cash liquidation detribution 10 Necashiquidation disebut this moment and the IRS $ determines that it has FATCA in 11 Exempo dividendo 12 Spoled private activity not been reported requin bondinbeat dividindo $ $ Account number one 19 States 15 Sute tax withheld RECIPIENTS rame Income westment expenses This is important tax Albert T. Gaytor Information and is For ipad 7 being furnished to the T Fongreyer US pomien IRS. If you are Street address (including apt no.) required to the Oompiers 12340 Cocoshell Rd retum, a negligence Spooled private abond penalty or other sanction may be City of own, or province, country, and Poni portal code $ $ imposed on your Coral Gables, FL 33134 10 Modiscount 11 Bond premium this income is long the datormines that it has FATCA $ not been reported que 12 fond newyobro 13 Bodrumband $ Account Internacion 14 Tcerpt and tax credi 15 Stue 18 Sweet 0 17 Stelle wild 16 x bond CUSIPO. $ RS. you Form 1099-INT (koop for your records) () www.in.gov.FOINT Department of the Treasury Internal Revenue Service Form 10.09-DIV (keep for your records) www.in.gov/Form1000W Department of the Treasury Internal Pene Service The Gaytars, also received interest of $800 from bonds issued by the Miami-Dade County Airport Authority (Form 1099 not shown). Albert went to the casino on his birthday and won big, as reflected on the following Form W-2G I CORRECTED checked PAYERS name, adress, cly or town, state or pronon.country. Op - Total ordinary dividenda OMB NO. 1845-0110 , , or foreign postal code, and wephone 1,102.32 Everglades Bank Corporation $ Dividends and 2020 1500 S. Krome Ave. 1. Clified dividende Quid Distributions Homestead, FL 33034 1,102.32 $ Form 1090-DIV 2a Totalpital de 2b Unreon, Sec. 1250 Copy B $ $ $ PAYERS TIN RECIPIENTS TIN For Recipient ad Collectibles Cagain 3e Section 2012 57-4443344 266-34-1967 $ FECERONIS Name Nondividend distributions encome tax W $ Allison Gaytor 0.00 This temportant to information and is 5 Seconde benefited to Street adrese including pt.no) $ the IRS.F you are MA red to the 12340 Cocoshell Road 7 Foreign tax paid 1 for US per return, anglance perly or other action may be City or lon, le province, country and Prin postal code $ imposed on you Coral Gables, FL 33134 o Covidien Chiquito diferencia en etter the one hand determine that has FATCA 11 Erre udende 12 Specified private otty not been reported | requirement bond individendi D $ $ Kocount number ise retruction 114 were 16 tet with $ $ Form 1099-DIV keep for your records) www.in.gov/Fom10000 Department of the Treasury - Internal Revenue Service 2 Date won CORRECTED (f checked PAYERS rore, troetatrons, city or town, province or stats, country, 1 Reportable whining and foreign postal 6,062.00 Mikkosukee Resort and Gaming 1321 Tamiami Hwy Miami, FL 33194 s Transaction CORRECTED (if checked) PAYER nome, street art, clty or town, state or provhon country, DP Unport compensato OMB NO. 1545-0120 or foreign postcode, and honen Florida Dept. of Econ. Opportunity 4.074.76 107 E. Jefferson Blvd. 2020 2 State or local income tax Tallahassee, FL 32399 refund 3 Type of OM NA 1845-03 2020 Form W-2G - Certain Gambling Winnings IRAS Is 1.600.00 Certain Government Payments For 1099-6 RECIPIENTS TIN PAYER'S TIN 21-5556666 RECIPIENTS Allison Gaytor 7 Whoice was $ protone 10 Window 266-51-1966 PAYER'Studera identition number PAYERS telephone number 22-7777777 305-555-1212 11 First D. 3 Box 2 amount is for tax your Feel conte tax with Copy B 150.00 For Recipient SRTAA pats BY THIS is important $ Information and TAGA pays Dr Check box 25 being used to the AS. Ir you are regled $ Inace Wade or busi ione arun, a Megan negligence penalty or on may imposed on your tres 10 tue Stue tato o 11 eirometr womes wit ang the IRS et It has not been reported 12 Second LD This information is being furnished to the Internal Reverse Service WINNERS Albert Gaylor the adrenal) 12340 Cocoshell Road city or town, state or province country and ZIP or foreign postal code Coral Gables, FL 33134 Account Numbruction Form 109-G op for your reco www.smo Department of the Treasury - Rever + Stroet adidas oluding apt. no. 13 S14 winning 12340 Cocoshell Rd DF-124562 Copy B Report this income Gilty or loun, province or state country, and ZP Ford postal code 15 come tax W16 Lockings on your federal tax Coral Gables, FL 33134 return this form shows federal $ $ 17 Local Hoce 18 of locally income tax withheld inbox attach this copy to your retum Une pe of peary, I declare that to the best cry wedge and at the time, and trpayer eftio sumber at have the correctly with me as the mean of the payment and any payments from wes, and tut no other person is to any part of the payments Signature Date Porn W-2G www.gome Department of the Towy-Inverse Service Albert and his family are covered by an employee-sponsored health plan at his work. Coconut Fishing pays $700 per month in premiums for Albert and his family. During the year, Allison was in the hospital for appendix surgery. The bill for the surgery was $10, 100 of which the health insurance reimbursed Albert the full $10,100. Albert had no other gambling income or losses for the year. . Coconut Fishing also pays for Albert's parking at the marina. The monthly cost is $270. On September 1, Allison opened a retail store that specializes in sports car accessories. The name of the store is "Taze Pass." The store is located at 617 Crandon Boulevard, Key Biscayne, FL 33149. The store uses the cash method of accounting for everything except inventory which is kept on an accrual basis. The store's EIN is 98-7321654. Allison purchased inventory in August and then started her business on September 1 with $40,100 of inventory. The Tres Pass accountant provided the following financial information: In February, Allison received $50,000 in life insurance proceeds from the death of her friend, Sharon. In July, Albert's uncle Ivan died and left him real estate (undeveloped land) worth $72,000. Five years ago, Albert and Allison divorced. Albert married Iris, but the marriage did not work out and they divorced a year later. Under the July 1, 2016 divorce decree, Albert pays Iris $11,500 per year in alimony. All payments were on time in 2020 and Iris' Social Security number is 667-34-9224. Three years ago, Albert and Allison were remarried. Coconut Fishing Charters, Inc. pays Albert's captain's license fees and membership dues to the Charter Fisherman's Association. During 2020, Coconut Fishing paid $1,300 for such dues and fees for Albert. Allison was laid off from her job on January 2, 2020. She received a Form 1099-G for unemployment , benefits: Income Statement 64.100 500 637600 Allison drove her 2012 Ford Explorer 1,701 miles for business related to Tees Pass. The Explorer was driven a total of 11,450 miles for the year. Included in the total 11,450 miles is 5,000 miles spent commuting to the store. Allison has the required substantiation for this business mileage. She uses the . standard mileage method. In July, Albert loaned a friend $7,000 so he could buy a car. Albert's friend lost his job in 2020 and stopped making payments on the loan. He plans to start making payments again, however, with additional interest as soon as he has new employment. . In late 2020, Albert started to mount and stuff some of his trophy fish to display in his "man cave" at the Saxtar'a home. Some of his friends liked Albert's taxidermy work and asked him to prepare a couple of trophy fish for them as well. Although he doubts he will ever sell any more stuffed fish, he received $150 and had no expenses related to this activity in 2020. . 40.100 37.886 77.96 37917 40.069 23.631 2.997 Toge Pass Auto Parts Calendar Year 2020 Financial Statements in US Dollars Revenue Gross Sales Loss Sales Returns and Allowances Net Sales Cost of Goods Sold Beginning inventory Add: Purchases Inventory Available Less Ending Inventory Cost of Goods Sold Gross Profit (Loss) Expenses Advertising Dues and Subscriptions Gifts Insurance Interest Legal and Professional Fees Licenses and Fees Miscellaneous Office Expense Payroll Taxes Postage Rent Repairs and Maintenance Supplies Telephone Travel Uniforms Utilities Vehicle Expenses Wagen Total Expenses Net Operating Income Other Income Gain (Loss) on Sale of Assets Interest Income Total Other Income Net Income (Loss) 180 805 1,700 315 900 82 1.266 510 The Gaxtans own a rental beach house in Hawaii. The beach house was rented for the full year during 2020 and was used by the Gaxtara during the year. The Saxta were active participants in the management of the rental house but the activity is not eligible for a QBI deduction. Pertinent information about the rental house is as follows: 7.500 401 630 781 9:40 390 975 Address: 1237 Pineapple St., Lihue, HI 96766 Gross rental income Mortgage interest Real estate taxes Utilities Cleaning Repairs The house is fully depreciated so there is no depreciation expense. $20.000 8,000 2,200 1,400 2,400 650 3.470 23,842 (311 Albert and Allison received the following combined statements 1099-DIV and 1099-B from their investment manager: (310) A review of the expense account detail reveals the following: The travel expense includes the costs Allison incurred to attend a seminar on sports car accessories. She spent $300 on airfare, $400 on lodging, $90 on a rental car, and $150 on meals. Allison has proper receipts for these amounts. The gift account details show that Allison gave a $30 gift to each of her six best suppliers. The supplies expense account detail reflects the purchase of 250 pens with the "Taas. Pass" logo inscribed on each pen. Allison gave the pens away to suppliers, customers, and other business contacts before the end of the year. . Uniforms expense reflects the cost to purchase polo shirts Allison provided for each employee (but not herself). The shirts have the Tees Pass logo printed on the front and back and are the required apparel while working but otherwise are just like any other polo shirts. The license and fee account includes a $600 fine Tags Pass paid to the state of Washington for environmental damage resulting from an oil spill. 2020 Mortgage Interest Statement Fortress Securities PO Box 1300 Gaithersburg, MD 20877 Copy B for Recipient IMPORTANT TAX DOCUMENT 2020 Form 1099-DIV Dividends and Distributions RECIPIENT'S TIN: 266-51-1966 Albert T. Gaytor Allison A Gaytor JT TEN WROS 12340 Cocoshell Rd Coral Gables, FL 33134 Total Capital Ordinary Qualified Gain Unrecap Nondividend Fund Name Dividend Dividends Distrib 1250 Gain Distrib Peach Fund 0.00 0.00 475.00 2020 Form 1099-B Proceeds from Broker and Barter Exchange Transactions CORRECTED if checked) RECIPIENT'S LENCERS sane, street address.city or town, stilor 'Caution: The weat how No. 1150 province, coutry, ZIP or foreign poslod, and phone ne not be fully dede by Limited on the amount and the cost and the Vizcaya National Bank word property may apply. Ns. 9871 Coral Way you need ily. Miami, FL 33134 actually paid by you, and iud by scherpen Fom 1096 Mortgage interest received from peperatorrow $ 11,428.19 RECIPIENTSILENCOR STIN PAYERS_BORROWER'S TIN 3 Mortgage arigration date 2 Outstanding mortges pred 60-7654321 266-51-1966 IS 317,034 44 03/01/2006 Petund of overpaid Mortgage range premi PAYER SVGORROWER'S rare $ Albert and Allison Gaytor Pavis paid on purchase of principal residence $ Street address coding st. 10) 71address of property Secuing mortgage is the same 12340 Cocoshell Road PAYERSBORROWERS address the box i choked, the address or despion is inbox City ortows, state or province, country, and ZIP or foreign postal code , Address or destrption of property securing mortgage me Coral Gables, FL 33134 instruccions Exempe- Fed Tax Interest State Tax Withheld Dividends Withheld 0.00 Copy B For Payer Borrower The information in bo nagid 111 port turimetio da med to the As.I you un nogurad taflar reipuree partynotis section na beiredo you find . to undert ut because you W dediction by l T 2 tiet t the posted in bars and of bechat you to the of tonsbe because you claimed torciddi 11 Montage acquisition date Number of properties in the 10 of Mortgage Descripe Date Ace 100 shs. Orange Co 02/11/2020 100 shs. Banana Co 07/17/2019 100 shs Grape Corp 12/18/2019 5 $1,000 Par Value 12/30/2010 Bonds due 4/2020 5,011.23 shs. Peach 05/30/2011 Mutual Fund Proces $3,000.00 2.100,00 9,050.00 Date Sold 04/16/2020 07/31/2020 09/25/2020 01/02/2020 Cost $2,350.00 4,200.00 10,400.00 Fed Tax Withheld $0.00 0.00 0.00 Account number Proceeds Basis Reported Reported to IRS to IRS Net Yes Net Yes Net Yes For 10 5,100.00 Department of the Treasury-inemal Revenue Service Keep for your records 5,415.00 www.igfontos 0.00 Net Yes Albert and Allison paid the following in 2020 (all by check or can otherwise be substantiated): 10/22/2020 59,750,00 56,000.00 0.00 Net Yes $ 600 6,000 On January 12, 2020, Albert and Allison sold their personal residence for $716,000 and purchased a new house for $725,000. This was their personal residence before and after the divorce (they have lived in it together for three years since remarrying). The old house cost $120,000 back in January of 2008 and they added on a new bedroom and bathroom a few years ago for a cost of $20,000. They also built a pool for a cost of $61,500. They moved into the new house on January 19, 2020. Albert and Allison received the following form: : Contributions to St. Anne's Catholic Church Tuition to St. Anne's Catholic School for Crocker (spring 2020) Clothes to Salvation Army (10 bags in good condition) Contributions to Marcus Rubius Congressional campaign Psychotherapy for Allison Prescription eyeglasses for Crocker Prescription medication and drugs Credit card interest Interest on Albert's college loans Actual state sales tax (including sales tax on new auto of $2,000) Investment interest expense on stock margin account Auto loan interest reported on Form 1098 (not shown here; auto was paid for by a home equity loan on residence) Auto insurance Cosmetic surgery for Albert Dave Deduction, CPA, for preparation of last year's tax return Safe-deposit box for storage of stocks and tax data Contribution to an educational savings account for Crocker Home property taxes Unreimbursed business expense (seminar on dealing with hijacking at sea) 240 250 2,300 413 1,903 1,345 3,125 3,421 345 860 1,600 4,500 765 100 1,000 4,677 700 In August 2020, Crocker was on an out-of-town field trip with the university band and his appendix burst. He required immediate surgery which was considered "out of network for the Gavtors health plan resulting in hospital and doctor's fees of $3,150 not covered by insurance. In addition, Allison drove 310 miles round trip to be with Crocker after the surgery and drove him home after he recovered. She spent two nights in a hotel at a cost of $170 per night. Use a computer software package such as Intuit Pracanaest to complete Form 1040 for Albert and Allison Gavtor for 2020. Be sure to save your data input files since this case will be expanded with more tax information in later chapters. Make assumptions regarding any information not given. In June, Albert purchased a new professional digital SLR camera for $7,950. While the Gaxtare were on vacation in August, someone broke into their residence and stole the camera. Albert's homeowners insurance did not reimburse him for any part of the loss since he declined the special premium add-on for high value items required by his policy. For the 2020 tax year, on April 15, 2021, Albert contributes $6,000 to his traditional IRA and Allison . contributes $6,000 to her traditional IRA. Albert is not covered by a qualified retirement plan at work. Albert managed to gather his gambling loss documentation and can substantiate gambling losses of $4,561 in 2020 (refer back to Chapter 2 for gambling winnings). The Sextana paid tuition and fees for both Crocker and Cayman to attend college. Recall that Crocker is a freshman at Brickell State and Cayman is a part-time student in community college. Crocker received a $1,000 scholarship from Brickell State. Crocker's Form 1098-T is shown below. The Gaxtara paid tuition and fees of $1,400 for Cayman in 2020. CORRECTED Preme, strechy record Power METSA foreign potloodtrub quod in die aperc Brickell State University 4,800.00 Tuition 2020 605 Crandon Blvd Statement Key Biscayne, FL 33149 Form 1098-T PLER Ruang Maraton SOSTIN STUDENTS Copy B 44-3421456 261-55-1212 For Student STUDENTS Adida Scholar This portar Crocker Gaytor ta and is being - y . Ass 10 Yhted the more miched to the Fom 12340 Cocoshell Rd, shirshor bords for a prior year y low state or protect and ZP or foruga pasta code campo defen.com to conductor Coral Gables, FL 33134 March Note Service Provider Acet. Hoe hat Cheesti last CheckedIn gradine 10 inscriererlunda proporto prepare the harmest ludunt Os www.is.govformio Department or the Tury. Intere Perene Service s 1.000.00 ngh sort Form 100B-T In December 2019, Albert's 82 vear-old aunt, Virginia Everglades (Social Security number 699-19-9000), was unable to support herself and moved in with the Santana She lived with them for all of 2020. The Gavtors, provided more than one-half of Aunt Virginia's support. Virginia's only source of income is a small annuity that paid her $3,100 in 2020. While Albert and Allison were working, the Saxtars hired a nanny service from time to time to take care of Aunt Virginia. The Saxtala, paid $3,400 to Nannus R Us in 2020. Nannvs R Us (EIN 34-1234123) is located at 80 SW 22nd Avenue, Miami, FL 33133. On September 14, 2020, Allison purchased the building where her store is located. She paid $375,000 for the building (which includes $100,000 for the land it is located on). Allison's store is the only business in the building. The depreciation on the store needs to be reflected on Schedule C of the business