BU 108 Prof. J. Rosa Tax Return Preparation Problem - 1 Justin (333-22-3333), and Demi Beiber (234-66-7777) are married and file a joint tax retum. Their address is 1111 Sleepy Street, Bayside, NY 11364. Justin is employed as an attorney for a large law firm. Demi is a commissioned salesperson for a pharmaceutical company. They are the sole support of two children, Lindsey (456-67-8989), 18 years of age, and Ce Lo (333-77-8888) 11 years of age, who reside with them the entire year. For 2020 they report the following income and expenses: W-2: Fed, Inc. Tax NYS Tax Wages Withheld Withheld Justin $ 51,000 4,750 2.500 Demi $45,000 3,900 1.750 Interest Income Chase Treasury Bonds New York State bonds Dividend Income IBM 1,000 1,000 4,000 1,000(400 return of capital) Other Items Demi contributed $2,000 to a traditional IRA Property Transactions On June 3, 2020, they sold 1000 shares of GM stock for $25 per share less a broker's commission of $500. The stock was purchased on October 2, 2019 for $35 per share plus a broker's commission of $600. On November 3, 2020, sold land for $100,000. The land was acquired on December 2, 2005 as an inheritance on the death on Aunt Sofie. At the time of her death the basis was $45,000 and the fair value was $60,000. There was a short term loss carryover from 2019 of $35,000 Final Return Practice 1 Itemized Deductions The Beibers paid the following medical bills for 2020 Medical insurance $ 6,500 Doctors and dentists 3,200 Eyeglasses 800 Prescriptions drugs 1,000 Non-prescription drugs 2,600 During the year, Lindsey sustained a severe injury to her nose, which required plastic surgery. The only qualified surgeon was located in Cleveland. The airfare for Lindsey and Demi, who accompanied her, was $800 in total. While in transit, they stayed at a hotel for two nights at $140 per night (they shared a room). Meals for the trip totaled $400 for the two of them. In 2020, they received a $1,000 reimbursement for doctor bills. The Beibers paid the following taxes and interest in 2020 in addition to the taxes withheld from their pay. Balance owed on 2019 state tax return Personal credit card interest Vacation loan interest Real estate taxes on principal residence $ 2.000 1,200 1,500 4,000 Mortgage interest on principal residence The Beibers contributed $400 cash to various qualified charities. 11,000 On August 1, 2020, during Hurricane Ida, a looter broke into their home and stole a valuable painting. They had purchased the painting on January 2, 2018 for $40,000. At the time of the loss the painting was worth $41,000. The painting was never recovered. The insurance company gave the Beibers only $21,000. It was a result of a federally declared disaster BU 108 Prof. J. Rosa Tax Return Preparation Problem - 1 Justin (333-22-3333), and Demi Beiber (234-66-7777) are married and file a joint tax retum. Their address is 1111 Sleepy Street, Bayside, NY 11364. Justin is employed as an attorney for a large law firm. Demi is a commissioned salesperson for a pharmaceutical company. They are the sole support of two children, Lindsey (456-67-8989), 18 years of age, and Ce Lo (333-77-8888) 11 years of age, who reside with them the entire year. For 2020 they report the following income and expenses: W-2: Fed, Inc. Tax NYS Tax Wages Withheld Withheld Justin $ 51,000 4,750 2.500 Demi $45,000 3,900 1.750 Interest Income Chase Treasury Bonds New York State bonds Dividend Income IBM 1,000 1,000 4,000 1,000(400 return of capital) Other Items Demi contributed $2,000 to a traditional IRA Property Transactions On June 3, 2020, they sold 1000 shares of GM stock for $25 per share less a broker's commission of $500. The stock was purchased on October 2, 2019 for $35 per share plus a broker's commission of $600. On November 3, 2020, sold land for $100,000. The land was acquired on December 2, 2005 as an inheritance on the death on Aunt Sofie. At the time of her death the basis was $45,000 and the fair value was $60,000. There was a short term loss carryover from 2019 of $35,000 Final Return Practice 1 Itemized Deductions The Beibers paid the following medical bills for 2020 Medical insurance $ 6,500 Doctors and dentists 3,200 Eyeglasses 800 Prescriptions drugs 1,000 Non-prescription drugs 2,600 During the year, Lindsey sustained a severe injury to her nose, which required plastic surgery. The only qualified surgeon was located in Cleveland. The airfare for Lindsey and Demi, who accompanied her, was $800 in total. While in transit, they stayed at a hotel for two nights at $140 per night (they shared a room). Meals for the trip totaled $400 for the two of them. In 2020, they received a $1,000 reimbursement for doctor bills. The Beibers paid the following taxes and interest in 2020 in addition to the taxes withheld from their pay. Balance owed on 2019 state tax return Personal credit card interest Vacation loan interest Real estate taxes on principal residence $ 2.000 1,200 1,500 4,000 Mortgage interest on principal residence The Beibers contributed $400 cash to various qualified charities. 11,000 On August 1, 2020, during Hurricane Ida, a looter broke into their home and stole a valuable painting. They had purchased the painting on January 2, 2018 for $40,000. At the time of the loss the painting was worth $41,000. The painting was never recovered. The insurance company gave the Beibers only $21,000. It was a result of a federally declared disaster