Arthur James, age 68, and his wife, Betty, age 63, live at 2010 Space Blvd., Satellite Beach, FL 32604 . Arthur's Social Security number is 299846745 and Betty's Social Security number is 60391-5782. Arthur and Betty had the attached items for tax year 2023. REQUIRED: Using the attached forms and the tax formula discussed in the text, prepare the information for the tax return for Arthur and Betty James for the current tax year. Be sure to show appropriate detail for items included and calculations of amounts for those items for each of the following areas. (1) Gross income. (2) Deductions for adjusted gross income (AGI). (3) AGI. (4) Deductions from AGI. (5) Taxable income. (6) Income tax liability. (7) Income taxes due or tax refund amount. \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMATION FOR TAX RETURN \\ CALCULATION OF ITEMIZED DEDUCTIONS FOR SCHEDULE A \\ \hline Itemized Deductions (Deductions From AGI): & & \\ \hline Medical Expenses: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total Medical Expenses & & \\ \hline Less: AGI Floor & & \\ \hline Deductible Medical Expenses & & \\ \hline State and Local Income Taxes & & \\ \hline Mortgage Interest & & \\ \hline Charitable Contributions & & \\ \hline Total Itemized Deductions & & \\ \hline & & \\ \hline Calculation of Standard Deduction Allowed: & & \\ \hline & & \\ \hline Total Standard Deduction Allowed & & \\ \hline & & \\ \hline Conclusion: & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ARTHURANDBETTYJAMESFORCURRENTTAXYEAR} \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Aross Income: & & \\ \hline Net rental income from vacation home (see calculation below) & & \\ \hline Total Gross Income & & \\ \hline Deductions For Adjusted Gross Income: & & \\ \hline & & \\ \hline & & \\ \hline Total Deductions For Adjusted Gross Income & & \\ \hline Adjusted Gross Income & & \\ \hline Deductions From Adjusted Gross Income: & & \\ \hline & & \\ \hline & & \\ \hline Taxable Income (enter \$0 if calculation is less than zero) & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMAION FOR TAX RETURN (CONTINUED) \\ FOR CURRENT TAX YEAR \\ \hline Tax Liability (from tax table) & & \\ \hline Federal Income Tax Withheld: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total Income Tax Withheld (Total Tax Payments) & & \\ \hline AmountofTaxOverpaidRefundDue(taxpaymentsexceedtaxliability) & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|r|}{ARTHURANDBETTYJAMESTAXINFORMATIONFORTAXYEAR2023} \\ \hline (a) & \multicolumn{3}{|c|}{ArthurworkedparttimeforMcWendysRestaurantasacookandearned$7,450duringtheyear.Bettydidnotworkduringtheyear.} \\ \hline (b) & \multicolumn{3}{|c|}{ArthurisretiredanddrawsbothSocialSecurityandapension.Theinformationfromthoseformsincludesthefollowing.} \\ \hline & (1) & \multicolumn{2}{|r|}{ArthursSocialSecuritybenefitstotaled$12,000duringtheyear.HemadepaymentsforMedicareinsuranceof$420.} \\ \hline & (2) & \multicolumn{2}{|r|}{Arthurreceivedpensionbenefitsof$15,500duringtheyear.ThedistributionsfromthepensionplanwerefullytaxablesinceArthurmadenocontributionstotheplan.} \\ \hline \multirow[t]{8}{*}{ (c) } & \multicolumn{3}{|c|}{ Arthur and Betty have joint investments from which they received the following income. } \\ \hline & (1) & \multicolumn{2}{|c|}{ Interest income. } \\ \hline & & ( i) & Interest on City of Jacksonville bonds, $350. \\ \hline & & (ii) & Interest on IBM corporate bonds, $525. \\ \hline & & (iii) & Interest on U.S. Treasury bills, $240. \\ \hline & (2) & \multicolumn{2}{|c|}{ Dividend income. } \\ \hline & & & DividendsonIntelcommonstock,$100.ThestockwaspurchasedonMarch10,2019. \\ \hline & & & DividendsonIBMcommonstock,$200.ThestockwaspurchasedonJanuary5,2015. \\ \hline \multirow[t]{5}{*}{ (d) } & \multicolumn{3}{|c|}{ArthurandBettyalsoownahomeinNorthCarolina.ArthurandBettyusethehomeduringtheentiremonthofAugustinordertoescapetheheatofFlorida.TheyrentthepropertytoothertenantsfortheentiremonthsofDecemberthroughJulyfor$800permonth.Theyhadthefollowingexpensesrelatedtothepropertyfortheyear.} \\ \hline & & Rept & and maintenance, $700. \\ \hline & & Utili & es, $1,150. \\ \hline & & Dep & ciation, $1,250. \\ \hline & & Prop & rty taxes, $2,000. \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMATION FOR TAX RETURN \\ CALCULATION OF NET RENTAL INCOME FOR SCHEDULE E \\ \hline Rental income from vacation home & & \\ \hline Rental expenses allowed: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total rental expenses allowed & & \\ \hline Net rental income from vacation home & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|ll|} \hline & \multicolumn{3}{|c|}{ARTHURANDBETTYJAMESTAXINFORMATION(CONTINUED)FORTAXYEAR2023} \\ \hline (e) & Arthur and Betty also had the following items during the year. \\ \hline & (1) & Premiums on medical insurance, $2,500. \\ \hline & (2) & Unreimbursed medical expenses, $3,000. \\ \hline & (3) & Property taxes on primary residence, $1,500. \\ \hline & (4) & Mortgage interest on primary residence, $3,250. \\ \hline & (5) & Charitable contributions to Last Methodist Church, all in cash, $1,200. They have \\ & \multicolumn{3}{|c|}{ proper substantiation for the contributions. } \\ \hline (f) & Federal income tax withheld. \\ \hline & (1) & Arthur's earnings from McWendy's, $745. \\ \hline & (2) & Arthur's pension, $2,200. \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline \multicolumn{2}{|l|}{ARTHURANDBETTYJAMESINFORMATIONFORTAXRETURNSOCIALSECURITYINCOMEWORKSHEETFORARTHUR} \\ \hline Arthur James & SSN: 299846745 \\ \hline Half of Social Security Benefits & \\ \hline Modified Income & \\ \hline 3. Special Modifications & \\ \hline 4. Add Lines 1+2+3 & \\ \hline 5. Certain Adjustments & \\ \hline 6. IRA Deduction & \\ \hline 7. Total Adjustments (Lines 5+6 ) & \\ \hline 8. Line 4 Minus Line 7 (Modified Adjusted Gross Income) & \\ \hline 9. $25,000($32,000 if married, filing jointly) & \\ \hline 10. Line 8 Minus Line 9 (enter $0 if calculation is less than zero) & \\ \hline \multicolumn{2}{|l|}{IfLine10iszero,noneofyourSocialSecurityBenefitsaretaxable.Ifline10isgreaterthanzero,yourtaxablebenefitsarecalculatedbelow.} \\ \hline 11. $9,000($12,000 if married, filing jointly) & \\ \hline 12. Line 10 Minus Line 11, But Not Less Than Zero & \\ \hline 13. Smaller of Lines 10 and 11 & \\ \hline 14. Half of Line 13 & \\ \hline 15. Smaller of Lines 1 and 14 & \\ \hline 16. 85% of Line 12 & \\ \hline 17. Lines 15+16 & \\ \hline 18. 85% of Line 1 & \\ \hline 19.SmallerofLines17and18.TaxableAmount.ToForm1040,Line20b.Form1040A,Line14b & \\ \hline \end{tabular} Arthur James, age 68, and his wife, Betty, age 63, live at 2010 Space Blvd., Satellite Beach, FL 32604 . Arthur's Social Security number is 299846745 and Betty's Social Security number is 60391-5782. Arthur and Betty had the attached items for tax year 2023. REQUIRED: Using the attached forms and the tax formula discussed in the text, prepare the information for the tax return for Arthur and Betty James for the current tax year. Be sure to show appropriate detail for items included and calculations of amounts for those items for each of the following areas. (1) Gross income. (2) Deductions for adjusted gross income (AGI). (3) AGI. (4) Deductions from AGI. (5) Taxable income. (6) Income tax liability. (7) Income taxes due or tax refund amount. \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMATION FOR TAX RETURN \\ CALCULATION OF ITEMIZED DEDUCTIONS FOR SCHEDULE A \\ \hline Itemized Deductions (Deductions From AGI): & & \\ \hline Medical Expenses: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total Medical Expenses & & \\ \hline Less: AGI Floor & & \\ \hline Deductible Medical Expenses & & \\ \hline State and Local Income Taxes & & \\ \hline Mortgage Interest & & \\ \hline Charitable Contributions & & \\ \hline Total Itemized Deductions & & \\ \hline & & \\ \hline Calculation of Standard Deduction Allowed: & & \\ \hline & & \\ \hline Total Standard Deduction Allowed & & \\ \hline & & \\ \hline Conclusion: & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ARTHURANDBETTYJAMESFORCURRENTTAXYEAR} \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Aross Income: & & \\ \hline Net rental income from vacation home (see calculation below) & & \\ \hline Total Gross Income & & \\ \hline Deductions For Adjusted Gross Income: & & \\ \hline & & \\ \hline & & \\ \hline Total Deductions For Adjusted Gross Income & & \\ \hline Adjusted Gross Income & & \\ \hline Deductions From Adjusted Gross Income: & & \\ \hline & & \\ \hline & & \\ \hline Taxable Income (enter \$0 if calculation is less than zero) & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMAION FOR TAX RETURN (CONTINUED) \\ FOR CURRENT TAX YEAR \\ \hline Tax Liability (from tax table) & & \\ \hline Federal Income Tax Withheld: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total Income Tax Withheld (Total Tax Payments) & & \\ \hline AmountofTaxOverpaidRefundDue(taxpaymentsexceedtaxliability) & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|r|}{ARTHURANDBETTYJAMESTAXINFORMATIONFORTAXYEAR2023} \\ \hline (a) & \multicolumn{3}{|c|}{ArthurworkedparttimeforMcWendysRestaurantasacookandearned$7,450duringtheyear.Bettydidnotworkduringtheyear.} \\ \hline (b) & \multicolumn{3}{|c|}{ArthurisretiredanddrawsbothSocialSecurityandapension.Theinformationfromthoseformsincludesthefollowing.} \\ \hline & (1) & \multicolumn{2}{|r|}{ArthursSocialSecuritybenefitstotaled$12,000duringtheyear.HemadepaymentsforMedicareinsuranceof$420.} \\ \hline & (2) & \multicolumn{2}{|r|}{Arthurreceivedpensionbenefitsof$15,500duringtheyear.ThedistributionsfromthepensionplanwerefullytaxablesinceArthurmadenocontributionstotheplan.} \\ \hline \multirow[t]{8}{*}{ (c) } & \multicolumn{3}{|c|}{ Arthur and Betty have joint investments from which they received the following income. } \\ \hline & (1) & \multicolumn{2}{|c|}{ Interest income. } \\ \hline & & ( i) & Interest on City of Jacksonville bonds, $350. \\ \hline & & (ii) & Interest on IBM corporate bonds, $525. \\ \hline & & (iii) & Interest on U.S. Treasury bills, $240. \\ \hline & (2) & \multicolumn{2}{|c|}{ Dividend income. } \\ \hline & & & DividendsonIntelcommonstock,$100.ThestockwaspurchasedonMarch10,2019. \\ \hline & & & DividendsonIBMcommonstock,$200.ThestockwaspurchasedonJanuary5,2015. \\ \hline \multirow[t]{5}{*}{ (d) } & \multicolumn{3}{|c|}{ArthurandBettyalsoownahomeinNorthCarolina.ArthurandBettyusethehomeduringtheentiremonthofAugustinordertoescapetheheatofFlorida.TheyrentthepropertytoothertenantsfortheentiremonthsofDecemberthroughJulyfor$800permonth.Theyhadthefollowingexpensesrelatedtothepropertyfortheyear.} \\ \hline & & Rept & and maintenance, $700. \\ \hline & & Utili & es, $1,150. \\ \hline & & Dep & ciation, $1,250. \\ \hline & & Prop & rty taxes, $2,000. \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ ARTHUR AND BETTY JAMES } \\ INFORMATION FOR TAX RETURN \\ CALCULATION OF NET RENTAL INCOME FOR SCHEDULE E \\ \hline Rental income from vacation home & & \\ \hline Rental expenses allowed: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total rental expenses allowed & & \\ \hline Net rental income from vacation home & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|ll|} \hline & \multicolumn{3}{|c|}{ARTHURANDBETTYJAMESTAXINFORMATION(CONTINUED)FORTAXYEAR2023} \\ \hline (e) & Arthur and Betty also had the following items during the year. \\ \hline & (1) & Premiums on medical insurance, $2,500. \\ \hline & (2) & Unreimbursed medical expenses, $3,000. \\ \hline & (3) & Property taxes on primary residence, $1,500. \\ \hline & (4) & Mortgage interest on primary residence, $3,250. \\ \hline & (5) & Charitable contributions to Last Methodist Church, all in cash, $1,200. They have \\ & \multicolumn{3}{|c|}{ proper substantiation for the contributions. } \\ \hline (f) & Federal income tax withheld. \\ \hline & (1) & Arthur's earnings from McWendy's, $745. \\ \hline & (2) & Arthur's pension, $2,200. \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline \multicolumn{2}{|l|}{ARTHURANDBETTYJAMESINFORMATIONFORTAXRETURNSOCIALSECURITYINCOMEWORKSHEETFORARTHUR} \\ \hline Arthur James & SSN: 299846745 \\ \hline Half of Social Security Benefits & \\ \hline Modified Income & \\ \hline 3. Special Modifications & \\ \hline 4. Add Lines 1+2+3 & \\ \hline 5. Certain Adjustments & \\ \hline 6. IRA Deduction & \\ \hline 7. Total Adjustments (Lines 5+6 ) & \\ \hline 8. Line 4 Minus Line 7 (Modified Adjusted Gross Income) & \\ \hline 9. $25,000($32,000 if married, filing jointly) & \\ \hline 10. Line 8 Minus Line 9 (enter $0 if calculation is less than zero) & \\ \hline \multicolumn{2}{|l|}{IfLine10iszero,noneofyourSocialSecurityBenefitsaretaxable.Ifline10isgreaterthanzero,yourtaxablebenefitsarecalculatedbelow.} \\ \hline 11. $9,000($12,000 if married, filing jointly) & \\ \hline 12. Line 10 Minus Line 11, But Not Less Than Zero & \\ \hline 13. Smaller of Lines 10 and 11 & \\ \hline 14. Half of Line 13 & \\ \hline 15. Smaller of Lines 1 and 14 & \\ \hline 16. 85% of Line 12 & \\ \hline 17. Lines 15+16 & \\ \hline 18. 85% of Line 1 & \\ \hline 19.SmallerofLines17and18.TaxableAmount.ToForm1040,Line20b.Form1040A,Line14b & \\ \hline \end{tabular}