Because it is important for accountants to demonstrate the filing requirements for individual tax returns, for this final project you will be completing an individual tax return and then analyzing this experience. There are several requirements for this project that should be submitted during the weeks when there are Portfolio Project Milestones (Modules 2, 3, 5, and 7) and that contribute to your final grade in this project. Key Component: Using the case data from the attached Case 1, complete the attached template that has the respective tax forms (page 1 of form 1040 and schedules) to complete the tax return. Complete all the applicable parts of the tax forms. Also, address any instructor feedback provided in the milestone submissions. Requirements: Submit your tax return and computations to the dropbox identified for that submission. Review the Portfolio Project grading rubric, which can be accessed from the Course Information page, to understand how you will be graded on this Portfolio Project. Contact your instructor if you have questions about the Portfolio Project.

Brian and Sheila Williams were married in October of 2005. They live at 1000 Main Street, Atlanta, GA 33127. Brian is a postal service worker. Sheila is a teacher at Grady High School. Brians social security number is 555-11-1111 and Sheilas social security number is 555-22-2222. They have a dependent daughter Jayla who is 10 years old (Born on May 12th). Jaylas social security number is 555-33-3333. In 2013, Brian's wages was $45,860 while Sheila's was $43,590.

Included or Excluded Items

Reasoning for Including or Excluding and if Including, Indicate amount to include

Two years ago, the taxpayer loaned a friend $2000. The friend has filed for bankruptcy this year and will not be able to repay

Earned $100 interest on county municipal bonds

Found a diamond worth $1000 on the ground

Received $500 in death benefits fron Brian's father

Received $4,000 court settlement. $1,000 was punitive damanges.

Brian paid $400/month in child support

Received a $1000 gift from his brother

Sheila won $100 playing bingo

Brian paid $200/month in alimony to his ex-wife

Sheila received a $1000 gift from her mother

Sheila spent $300 on supplies for her classroom

Portfolio Investments

Stock

Acquired

Sold

Sales Price

Cost (Basis)

Qualified Dividends

Red Stock

2/1/2013

10/5/2013

$6,000

$2,500

$0

White Stock

6/11/2006

10/15/2013

$5,000

$4,000

$100

Blue Stock

10/1/2002

8/3/2013

$2,000

$10,000

$0

Black Stock

3/6/2013

12/15/2013

$3,000

$5,000

$0

Yellow Stock

4/5/2000

N/A

N/A

$5,000

$300

Interest Income Source

Amount

Money Market Account

$200

Savings Account

$25

State Municipal Bonds

$35

Rental Property

They own and rent two pieces of residential real estate in Miami, FL. These properties were acquired with cash (so there are no mortgages on the homes). They both have real estate broker licenses in Georgia and Florida. They dedicate enough hours (through their business) to qualify as a real estate professional with regard to these properties.

Property 1

The first property is located at 17750 NW 17th Ave, Miami, FL. They collect $1,000 monthly in rent. The property was purchased June 30, 2010 for $150,000. The tax records show that the value of the land is $30,000 and the value of the home was $90,000 when purchased. They actively participate in the management of the real property.

The property has the following expenditures:

Property tax

$7,000/yr

Repairs

$ 900/yr

Insurance

$1,200/yr

Washing Machine

$300

(purchased 6/2/2012)

Refrigerator

$700

(purchased 7/1/2013)

Furniture

$2,000

(purchased 4/1/2011)

Property 2

The second property is located at 5610 NW 11th Ave, Miami, FL. They collect $1,500 monthly in rent. The property was purchased on June 12, 2010 for $100,000. The tax records show that the value of the land is $20,000 and the value of the home was $80,000 when purchased. They actively participate in the management of the real property.

The property has the following expenditures:

Property tax

$6,200/yr

Repairs

$3,000/yr

Insurance

$1,200/yr

Legal fees

$ 500/yr

Advertising Expense

$ 500/yr

***This is a suggested depreciation schedule. You may adapt the schedule as long as the instructor can follow your calculations.

Name(s) shown on Form 1040

Property 1

*27.5 Residential Real Estate

5 year MACRS

Market

Purchase Price

Basis

Dep Rate

Rate

Basis

Dep. Amount

Washing Machine

Refrigerator

Furniture

*27.5 Residential Real Estate

Property 1

Total

Property 2

**27.5 Residential Real Estate

Market

Purchase Price

Basis

Dep Rate

**27.5 Residential Real Estate

Property 2

Total