Client Facts: Nick M. Viall and Rachel A. Lindsay, husband and wife, file a joint return. They live at 113 Bachelor Way, Austin, TX. 42871. Nicks Social Security number is 234-56-7809, and Rachels is 987-56-4321. Nick was born on November 12, 1956, and Rachel was born on September 25, 1962. Nick and Rachel file a joint tax return. Nick retired from ABC Medical, and Rachel works part-time as an attorney. They furnished over half of the total support of each of the following individuals, all of whom live at their home: Corinne Olympios, Rachels friend, age 30, moved in with Nick and Rachel in late 2016. Corinne moved in because she lost her job and needed somewhere to stay. She has yet to find a new job, and Rachel and Nick provided over half of her support. Corinnes Social Security Number is 345-67-8900. Emma Viall, their daughter, age 22, a full-time student, and has no income of her own for 2017. Emmas Social Security number is 111-00-2222. Ben Viall, their son, age 26, is a full-time graduate student with gross income of $4,200. Bens Social Security number is 123-45-6789. Nick and Rachel had the following gross income for 2017: Rachel earned a salary of $40,000 working part-time as a tax-accountant during busy season. Nick received $2,500 per month from a pension he earned through ABC Medical. He started receiving these payments in October of 2015, and his investment in the pension was $84,000. Interest income of $22,000 from various corporate bond investments. Interest income of $10,000 from bonds issued by the city of Austin. Other information that affects their tax return for the year is as follows: Rachel had $6,000 Federal tax withheld from her paycheck during the year and $2,500 in state income taxes withheld. The couples home was damaged by a fire due to faulty electrical wiring. The cost of their home was $500,000. The fair market value of the home before the fire was $600,000, and the fair market value after the fire was $550,000. The received a reimbursement from their insurance company of $35,000 to help cover the cost of the repairs. The couple had other expenses that were all paid in 2017, which they told you may qualify as itemized deductions: Property taxes on their home - $7,750 Mortgage interest - $28,000 (acquisition indebtedness; balance of $450,000 at the end of the year) Charitable contribution (cash) -$3,000 (to Trump Foundation, a qualified organization) They will deduct state income taxes paid during the year, rather than sales taxes paid during the year. In 2017, Nick started provided medical consulting services as a sole proprietor and had the following income and expenses from his consulting business: Consulting fees received - $120,000 Liability insurance premiums paid - $1,000 Office supplies - $400 Meals with clients (all reasonable in amount) - $1,500 He will use the cash method of accounting for tax purposes. Nick drove his personal automobile to/from meeting clients, for a total of 2,000 miles in 2017. He used the same vehicle for personal purposes, but did not drive his wifes car at all. Nick verified that he has kept thorough written records to support the deduction for his business transportation. Nick made an investment in an ultrasound machine, which he will use in his consulting business. He placed this in service on September 29, 2017, and paid $30,000. The equipment has a 5-year class life. He does not want to expense any of the cost under Section 179 or take bonus depreciation on the machine, but will use MACRS to calculate his depreciation deduction in 2017. Nick took a business trip to a clients office during the year. He had no personal days on this trip. The expenses of the trip were: Airfare - $425 Lodging - $1,200 Parking at the airport - $65 Taxi from the airport to the hotel - $30 Meals while traveling - $410 Based on the advice of a friend, Nick made quarterly estimated tax payments (Federal tax) in anticipation of the tax he would owe on his consulting income in 2017, totaling $24,000. The couple had the following transactions involving their investment assets during 2017: Sold 500 shares of Urban Enterprises on 2/14/2017 for $185,000. (Stock was inherited from Nicks father, who died on November 28, 2016. The FMV of the stock on that date was $172,000; Nicks father had purchased the stock for $100,000.) Sold 100 shares of Harbaugh Inc. stock on 5/1/2017 for $25,000. (Stock was purchased on 1/2/2016 for $32,500.) Sold 300 shares of Buckeye Corp. stock on 11/1/2017 for $100,000. (Stock was purchased on 11/1/2016 for $112,000). All of these transactions were reported to them on form 1099-B from their investment company, and the basis was reported to the IRS for all of these transactions. Assignment Instructions: Individually or with a partner, prepare the following for 2017: Form 1040; Schedules A, B, C , D, and SE; and Forms 4562 (page 1 only), and 4684, for Nick Viall and Rachel Lindsay