Comprehensive Problem $4-2$A

Skylar and Walter Black have been married for $25$ years. They live at $883$ Scrub Brush Street, Unit $52$B$,$ Las Vegas, NV $89125.$ Skylar is self$-$employed and Walter is a high school teacher. Skylar's Social Security number is $222-43-7690$ and Walter's is $700-01-0002.$ Walter's birthdate is January $21,1968,$ and Skylar's is February $14,1981.$ The Blacks provide all the support for Skylar's mother, Rebecca Backin $($Social Security number $411-66-2121),$ who lives in a nursing home in Reno, NV$,$ and has no income.

Walter's father, Alton Black $($Social Security number $343-22-8899),$ lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $$7,600$ in $2023,$ the Blacks provide more than half of Alton's support. If Rebecca or Alton qualify as dependents, Skylar and Walter can claim a $$500$ other dependent credit for each.

Walter's earnings from teaching are included on the W$-2($see separate tab$).$

The Blacks moved from New Hampshire to Nevada. As a result, they sold their house in New Hampshire on January $4,2023($see $1099-$S below$).$ They originally paid $$80,000$ for the home on July $3,1997.$ They spent $$14,000$ on improvements over the years and paid $$31,474$ in selling costs.

$$ CORRECTED $($if checked$)$

FILER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone number

Dartmouth Title and Escrow

$43$ S Main St

Hanover NH $037551$ Date of closing

$01/04/2023$ OMB No$.1545-0997$

Form $1099-$S

$($Rev$.$ January $2022)$ Proceeds From Real Estate Transactions

$2$ Gross proceeds

$ $629,474\mathrm{.}00$ For calendar year

$2023$

FILER'S TIN TRANSFEROR'S TIN $3$ Address $($including city, state, and ZIP code$)$ or legal descriptior

$34$ Maple Street

Hanover NH $03755$ Copy B

For Transferor

This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.

$44-1233211700-01-0002$

TRANSFEROR$$S name

Walter and Skylar Black

Street address $($including apt. no$.)$

$883$ Scrub Brush Street, $52$B

City or town, state or province, country, and ZIP or foreign postal code

Las Vegas, NV $89125$

$4$ Transferor received or will receive property or services as part of the consideration $($if checked$)......................$

$5$ If checked, transferor is a foreign person $($nonresident alien, foreign partnership, foreign estate, or foreign trust$)...........$

Account number $($see instructions$)6$

$ Buyer's part of real estate tax

Form $1099-$S $($Rev$.1-2022)($keep for your records$)$ www$.$irs.gov$/$Form$1099$S Department of the Treasury $-$ Internal Revenue Service

The Blacks own a ski condo located at $123$ Buncombe Lane, Brian Head, UT $84719.$ The condo was rented for $189$ days during $2023$ and used by the Blacks for $21$ days. The rental activity does not rise to the level to qualify for the QBI deduction. Pertinent information about the condo rental is as follows:

Line Item Description Amount

Rental income $$25,000$

Mortgage interest reported on Form $109812,000$

Homeowners' association dues $4,200$

Utilities $4,400$

Maintenance $4,600$

Depreciation $($assume fully depreciated$)0$

The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo.

Skylar runs a small car wash in Las Vegas as a sole proprietor. The business name is A$1$A Car Wash and is located at $4900$ Cutler Ave NE$,$ Las Vegas, NV $89146.$ The employer identification number is $19-3451234.$ She uses the cash method of accounting and does not track inventory of the sundries she sells $($air fresheners, etc.$).$ She therefore does not have beginning or ending inventories and recognizes the cost as supplies expense. The business code for a car wash is $811192.$ Her financial results for $2023$ were as follows:

Line Item Description Amount

Revenues:

Car Wash $$32,100$

Sundries $3,200$

Total $$35,300$

Expenses:

Payroll $$22,000$

Utilities $2,000$

Depreciation $0$

Taxes $1,000$

Licenses $300$

Sundries cost $600$

Insurance $900$

Advertising $500$

Total $$27,300$

Net profit $$8,000$

The business office at the car wash is not conducive to any type of work. It is basically a glorified broom closet. As a result, Skylar has a home office in their primary residence $($which they rent$).$ The office is $200$ square feet in their $2,000$ square foot apartment. They pay rent of $$16,000$ per year and their $2023$ utilities are $$1,200.$

In $2019,$ Walter loaned his friend, Hank Shorter $$5,000.$ In $2023,$ Hank declared bankruptcy and Walter is certain he will never get paid.

Walter is attending the Las Vegas Polytechnical University, pursuing a master's degree in chemistry. His employer has an education assistance program that paid Walter $$5,250$ in $2023.$ His total $2023$ tuition was $$10,000.$ The remaining tuition was paid for