Alice J. and Bruce M Jones are meried whoe a joint ret Aice's is the ofice birthday is September 21, 1961, and Brace's is Jume 27, 1960. mnager for Ames Dental Clinic. Alice is the CPA t Lehman, York &Hunter CPA, LP. The Jones provide over half of the support of their two children, Cynthia (bon number (017-44-9126) and Jon (bom February 7 January 25, 1994, Social 1995, Social Security mumber (017-27-4143), who live with them. Both children are time students and live with the Jones except when they are asway at college her third year of college, and eamed $7,500 from a summer intenship in 2017, and Joln is in his first year of college and he eamed $4,200 from a the Jones' paid $3,000 for Cynthia's college tuition and $2,500 for John's college tuition The Jones also provided all the support for their 26-year-old son Ryan who recently graduated from law school but cannot find employment. Ryan lives in DC. in in 2017. In 2017, According to Mr. Jones on July 01, 2017, he and his wife exchanged their two- family house in Westchester County (378 Pinebrook Blvd, New Rochelle, NY), which they rented entirely from January 01, 2009 to July 01, 2017, for a four family rental located at 581 Atlantic Avenue, Brooldyn, NY. At the time of the exchange, the of the two-family house was $900,000, and the adjusted basis was $?m (Calculate based on information provided below). The six-family house had an adjusted basis of $300,000 and a FMV of $850,000. The two-family home was subject to a $50,000 mortgage, which the buyer assumed The Jones also owned and rented a two-umit commercial retail building located at 1560 Avenue A, New York NY, which they purchased on December 01, 2016 and placed in service on January 01, 2017. Information for all three of the rental properties is listed below In March 2017, Bruce decided to start his own business, a retail bicycle shop to be located in NYC near Central Park called Bruce's Bikes." On April 20, 2017, Bruce signed a 10-year lease at a monthly rental rate of $10,000, effective May 01, 2017, for retail space on 110" Street and CPW. The lease provided that Bruce was responsible for the costs of improving the retail space for its intended use. The terms of the lease also provided that the first three months were rent-free so that Bruce could complete the construction needed to operate a retail bike shop. When Bruce executed the lease he paid he landlord $30,000 as a security deposit. On May 01, 2017, Bruce paid a contractor $175,000 to provide all construction work relating to the build-out, which included electrical, plumbing, and carpentry On June 01, 2017, Bruce purchased the following aset for Dre bunines the assets for the business: Furnibure &Fixtures Computer Equipment $45,000 $ 10,500 $ 11,750 on a grand opening on July 01, 2017, the construction July 21, 2017, cansing Bruce to dlay the grand opening util a new truck for $24,000, which weighs to finance the new business with the $100,000 inberitance he was not August 01, 2017 On August 01, 2017, Bruce 9,850 pounds, to be used 100% in the for piclkups and deliveries. received on 03/01/2017, from his late father's estate. Bruce also planned to use $50,000 of savings he had invested with Madoff Investment Securities MIS) but learned on 3/29/2017, that his entire savings was lost as a result of a massive ponzi scheme. In order to come up with the additional fiumds needed to finance the construction, inventory, Bruce's grandfather loaned him $50,000 on 05/15/2017. On 2017, Bruce received a letter from his grandfather stating that he forgives the entire $50,000 loan effectively immediately For 2017, the bike shop generated the following revenues and incurred the following $245,000.00 105,000.00 65,000.00 50,000.00 25,000.00 10,000.00 9,000.00 5,500.00 1500.00 1,200.00 1,050.00 1,850.00 5000.00 55,200.00 Sales, Rental, & Service Revenue Inventory purchased Inventory on hand at December 31, 2017 Rent from (August 01- December 31, 2017 Salaries Promotional expense Travel to Trade Shows Meals & Entertainment Postage and Delivery Telephone Attomey fees Pre-startup investigative expense Bnce has decided that he wants to minimize his tax as much as lezallv possble and has requested your assistance in preparing his 201 Federa income tax return Bnce has asked you to deprec ate al much of the capital expenditures a legall possible but only wants to we IRC S 1i9 expense or, the equipment, funiture und fiothures, nd computer equigment. Bruce does not Want to use fist year boms depreciation The company has adopted the accrue method of accounting for inventory and cath method for all other purposes. .On March 15, 2017, Yok T Inc. filed for bankruptcy Bruce and a fiend total loss for its' only two company on May 15, 2013, with each owning 50% ofthe otstanding shares. Both Bruce and his friend each initially contributed $35,000 in exchange for their 50% interest in the company. the Bruce and Alice earmed $2,500.00 interest income from savings in 2017. Bruce earned $1,500 in interest income from US Treasury Bonds in 2017 Morgan Chase Stock, which he purchased on September 01, 2017 which he purchased on July 01, 2015 for $30,000 policy, and on December 31, 2017, Bruce received a check for $100,000 from On October 18, 2017, Bruce received $1,250 of dividend income from JP On November 15, 2017, Bruce sold some of his JP Morgan Stock for $75,000, Bruce was named as the sole beneficiary on his late mother's life insurance the insurance conspany, which he held and deposited on January 02, 2018. On June 13, 2017, Bruce sold 1,000 shares Citibank Stock for $20,000. He . purchased the stock on May 17, 2015 for $49,000 On November 04, 2017, Alice received a settlement award for injuries sustained in 2016. The settlement award included the following amounts o Reimbursements of medical expenses which were not decducted on $10,000 530,000 520,000 $18,000 ious tax retums Loss incote o Punitive damages Compensatory relating to a broken leg On November 03. 2016. Bruce determined that a personal loan to a fiend was uncollectible because his friend had recently and unexpectedy died Te amount of tie loar was $7 903 Bruce collected $7 50000 per mecth for three menths (October n December in rental income on 5S1 Atlantic Atenue For 40 Bnace paid mortgage ziterest of $6200 and real e tate taxes of S 00, Brace paid no other ilio/Desktop/Fall%2020 1996201ax%20Project%20.pdf epenses in 2017 ftx 581 Aflantic Avenoe. The property wa placed in service on October 01, 2017 .Otber Rental Incone and Expenses for 2017 inchuded: Reatal Income Mortgage Interest Expense Real Estate Taxes Utilities Insurance Water & Sewer Place in Service Purchase Price 000.00 $10,000.00 $4,000.00 $2,000.00 $2,500.00 $1,200.00 01/01/2007 $550,000.00 105,000 $12,000.00 $8,000.00 $6,000.00 $5,000.00 3,000.00 01/01/2016 820,000.00 Bruce and Alice 2017 W-2 statement shows the following wages and withholdings Bruce 1) Wages 2) FWT 3) SWT $50,000 8,500 6,000 4,200 $45,000 ,000 5,500 3,800 The Jones also paid the following personal expenses in 2017: a Contributions to Museum of Modern Art (a 50% Organization): $25,000 $42,100 $40,800 $12.300 $10,600 $3,600 1 Cash i JP Morgan Chase Stock FMV (Long Term) AB b. Real Estate Taxes on primary residence c. Mortgage interest on primary residence d Student loan Interest Instructions Make realistic assumptions about any missing or inconsustent data and state your assumptions on a sepurate typed schedule Required for 2011 (Do nct prepare Prepare form 1040, including all schedules and forms NYSNYC tax rettum Taxpavers wishes to ue the Reduge Deduction Election for charitable dotations All work must be typed snto approted IRS foms ino hnd written form will be S to deternune hos to huandle depreciation amatization and IRC Csy handin thd approgriate fomas and dedules Alice J. and Bruce M Jones are meried whoe a joint ret Aice's is the ofice birthday is September 21, 1961, and Brace's is Jume 27, 1960. mnager for Ames Dental Clinic. Alice is the CPA t Lehman, York &Hunter CPA, LP. The Jones provide over half of the support of their two children, Cynthia (bon number (017-44-9126) and Jon (bom February 7 January 25, 1994, Social 1995, Social Security mumber (017-27-4143), who live with them. Both children are time students and live with the Jones except when they are asway at college her third year of college, and eamed $7,500 from a summer intenship in 2017, and Joln is in his first year of college and he eamed $4,200 from a the Jones' paid $3,000 for Cynthia's college tuition and $2,500 for John's college tuition The Jones also provided all the support for their 26-year-old son Ryan who recently graduated from law school but cannot find employment. Ryan lives in DC. in in 2017. In 2017, According to Mr. Jones on July 01, 2017, he and his wife exchanged their two- family house in Westchester County (378 Pinebrook Blvd, New Rochelle, NY), which they rented entirely from January 01, 2009 to July 01, 2017, for a four family rental located at 581 Atlantic Avenue, Brooldyn, NY. At the time of the exchange, the of the two-family house was $900,000, and the adjusted basis was $?m (Calculate based on information provided below). The six-family house had an adjusted basis of $300,000 and a FMV of $850,000. The two-family home was subject to a $50,000 mortgage, which the buyer assumed The Jones also owned and rented a two-umit commercial retail building located at 1560 Avenue A, New York NY, which they purchased on December 01, 2016 and placed in service on January 01, 2017. Information for all three of the rental properties is listed below In March 2017, Bruce decided to start his own business, a retail bicycle shop to be located in NYC near Central Park called Bruce's Bikes." On April 20, 2017, Bruce signed a 10-year lease at a monthly rental rate of $10,000, effective May 01, 2017, for retail space on 110" Street and CPW. The lease provided that Bruce was responsible for the costs of improving the retail space for its intended use. The terms of the lease also provided that the first three months were rent-free so that Bruce could complete the construction needed to operate a retail bike shop. When Bruce executed the lease he paid he landlord $30,000 as a security deposit. On May 01, 2017, Bruce paid a contractor $175,000 to provide all construction work relating to the build-out, which included electrical, plumbing, and carpentry On June 01, 2017, Bruce purchased the following aset for Dre bunines the assets for the business: Furnibure &Fixtures Computer Equipment $45,000 $ 10,500 $ 11,750 on a grand opening on July 01, 2017, the construction July 21, 2017, cansing Bruce to dlay the grand opening util a new truck for $24,000, which weighs to finance the new business with the $100,000 inberitance he was not August 01, 2017 On August 01, 2017, Bruce 9,850 pounds, to be used 100% in the for piclkups and deliveries. received on 03/01/2017, from his late father's estate. Bruce also planned to use $50,000 of savings he had invested with Madoff Investment Securities MIS) but learned on 3/29/2017, that his entire savings was lost as a result of a massive ponzi scheme. In order to come up with the additional fiumds needed to finance the construction, inventory, Bruce's grandfather loaned him $50,000 on 05/15/2017. On 2017, Bruce received a letter from his grandfather stating that he forgives the entire $50,000 loan effectively immediately For 2017, the bike shop generated the following revenues and incurred the following $245,000.00 105,000.00 65,000.00 50,000.00 25,000.00 10,000.00 9,000.00 5,500.00 1500.00 1,200.00 1,050.00 1,850.00 5000.00 55,200.00 Sales, Rental, & Service Revenue Inventory purchased Inventory on hand at December 31, 2017 Rent from (August 01- December 31, 2017 Salaries Promotional expense Travel to Trade Shows Meals & Entertainment Postage and Delivery Telephone Attomey fees Pre-startup investigative expense Bnce has decided that he wants to minimize his tax as much as lezallv possble and has requested your assistance in preparing his 201 Federa income tax return Bnce has asked you to deprec ate al much of the capital expenditures a legall possible but only wants to we IRC S 1i9 expense or, the equipment, funiture und fiothures, nd computer equigment. Bruce does not Want to use fist year boms depreciation The company has adopted the accrue method of accounting for inventory and cath method for all other purposes. .On March 15, 2017, Yok T Inc. filed for bankruptcy Bruce and a fiend total loss for its' only two company on May 15, 2013, with each owning 50% ofthe otstanding shares. Both Bruce and his friend each initially contributed $35,000 in exchange for their 50% interest in the company. the Bruce and Alice earmed $2,500.00 interest income from savings in 2017. Bruce earned $1,500 in interest income from US Treasury Bonds in 2017 Morgan Chase Stock, which he purchased on September 01, 2017 which he purchased on July 01, 2015 for $30,000 policy, and on December 31, 2017, Bruce received a check for $100,000 from On October 18, 2017, Bruce received $1,250 of dividend income from JP On November 15, 2017, Bruce sold some of his JP Morgan Stock for $75,000, Bruce was named as the sole beneficiary on his late mother's life insurance the insurance conspany, which he held and deposited on January 02, 2018. On June 13, 2017, Bruce sold 1,000 shares Citibank Stock for $20,000. He . purchased the stock on May 17, 2015 for $49,000 On November 04, 2017, Alice received a settlement award for injuries sustained in 2016. The settlement award included the following amounts o Reimbursements of medical expenses which were not decducted on $10,000 530,000 520,000 $18,000 ious tax retums Loss incote o Punitive damages Compensatory relating to a broken leg On November 03. 2016. Bruce determined that a personal loan to a fiend was uncollectible because his friend had recently and unexpectedy died Te amount of tie loar was $7 903 Bruce collected $7 50000 per mecth for three menths (October n December in rental income on 5S1 Atlantic Atenue For 40 Bnace paid mortgage ziterest of $6200 and real e tate taxes of S 00, Brace paid no other ilio/Desktop/Fall%2020 1996201ax%20Project%20.pdf epenses in 2017 ftx 581 Aflantic Avenoe. The property wa placed in service on October 01, 2017 .Otber Rental Incone and Expenses for 2017 inchuded: Reatal Income Mortgage Interest Expense Real Estate Taxes Utilities Insurance Water & Sewer Place in Service Purchase Price 000.00 $10,000.00 $4,000.00 $2,000.00 $2,500.00 $1,200.00 01/01/2007 $550,000.00 105,000 $12,000.00 $8,000.00 $6,000.00 $5,000.00 3,000.00 01/01/2016 820,000.00 Bruce and Alice 2017 W-2 statement shows the following wages and withholdings Bruce 1) Wages 2) FWT 3) SWT $50,000 8,500 6,000 4,200 $45,000 ,000 5,500 3,800 The Jones also paid the following personal expenses in 2017: a Contributions to Museum of Modern Art (a 50% Organization): $25,000 $42,100 $40,800 $12.300 $10,600 $3,600 1 Cash i JP Morgan Chase Stock FMV (Long Term) AB b. Real Estate Taxes on primary residence c. Mortgage interest on primary residence d Student loan Interest Instructions Make realistic assumptions about any missing or inconsustent data and state your assumptions on a sepurate typed schedule Required for 2011 (Do nct prepare Prepare form 1040, including all schedules and forms NYSNYC tax rettum Taxpavers wishes to ue the Reduge Deduction Election for charitable dotations All work must be typed snto approted IRS foms ino hnd written form will be S to deternune hos to huandle depreciation amatization and IRC Csy handin thd approgriate fomas and dedules