Comprehensive Problem 4 1 Skylar and Walter Black have been married for 5 years They live at 883 Scrub Brush Street, Apt 52B, Las Vegas, NV 89125 Skylar is a homemaker and Walter is a high school teacher His W 2 form is located on the next tab Skylar's Social Security number is 222 43 7690 and Walt's is 700 01 0002 The Blacks incurred the following expenses during their move from Maine to Nevada in January of 2017 Cost of moving furniture $4,775 Travel (2,988 miles at $0 17) 508 Lodging en route 520 Meals en route 90 House hunting trip before the move 750 The school district reimbursed Walter $550 for moving expenses These are reflected on his W 2 Walters previous job, as a high school teacher in Maine, was only 5 miles from his home Skylar was unemployed prior to the move The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719 The condo was rented for 183 days during 2017 and used by the Blacks for 17 days Pertinent information about the condo rental is as follows Rental income $16,000 Mortgage interest reported on Form 1098 8,600 Homeowners' association dues 5,200 Utilities 1,200 Maintenance 3,800 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 Required Complete Form 1040 and the schedules and forms provided for the Blacks If an amount box does not require an entry or the answer is zero, enter 0 Do not round any percentages If required, round your answers to the nearest dollar If required, enter a loss as a negative number on the tax form Do not enter deductions as negative numbers Note Special instructions for Form 8582 If required, use the minus sign to enter a loss as a negative number on the lines 1d, 4 and 16 However, per the instructions on the tax return, enter all numbers in Part II as positive amounts Complete the Blacks' Schedule E SCHEDULE E (Form 1040) Department of the Treasury Internal Revenue Service (99) Supplemental Income and Loss (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc ) Attach to Form 1040, 1040NR, or Form 1041 Go to www irs gov ScheduleE for instructions and the latest information OMB No 1545 0074 2017 Attachment Sequence No 13 Name(s) shown on return Walter and Skylar Black Your social security number 700 01 0002 Part I Income or Loss From Rental Real Estate and Royalties Note If you are in the business of renting personal property, use Schedule C or C EZ (see instructions) If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40 A Did you make any payments in 2017 that would require you to file Form(s) 1099 (see instructions) Yes No B If Yes, did you or will you file required Forms 1099 Yes No 1a Physical address of each property (street, city, state, ZIP code) A 123 Buncombe Lane, Brian Head, UT 84719 B C 1b Type of Property (from list below) 2 For each rental real estate property listed above, report the number of fair rental and personal use days Check the QJV box only if you meet the requirements to file as a qualified joint venture See instructions Fair Rental Days Personal Use Days QJV A 3 A B B C C Type of Property 1 Single Family Residence 3 Vacation Short Term Rental 5 Land 7 Self Rental 2 Multi Family Residence 4 Commercial 6 Royalties 8 Other (describe) Income Properties A B C 3 Rents received 3 4 Royalties received 4 Expenses 5 Advertising 5 6 Auto and travel (see instructions) 6 7 Cleaning and maintenance 7 8 Commissions 8 9 Insurance 9 10 Legal and other professional fees 10 11 Management fees 11 12 Mortgage interest paid to banks, etc (see instructions) 12 13 Other interest 13 14 Repairs 14 15 Supplies 15 16 Taxes 16 17 Utilities 17 18 Depreciation expense or depletion 18 19 Other (list) Homeowners' Association Dues 19 20 Total expenses Add lines 5 through 19 20 21 Subtract line 20 from line 3 (rents) and or 4 (royalties) If result is a (loss), see instructions to find out if you must file Form 6198 21 22 Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) 22 ( ) ( ) ( ) 23a Total of all amounts reported on line 3 for all rental properties 23a b Total of all amounts reported on line 4 for all royalty properties 23b c Total of all amounts reported on line 12 for all properties 23c d Total of all amounts reported on line 18 for all properties 23d e Total of all amounts reported on line 20 for all properties 23e 24 Income Add positive amounts shown on line 21 Do not include any losses 24 25 Losses Add royalty losses from line 21 and rental real estate losses from line 22 Enter total losses here 25 ( ) 26 Total rental real estate and royalty income or (loss) Combine lines 24 and 25 Enter the result here If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Form 1040, line 17, or Form 1040NR, line 18 Otherwise, include this amount in the total on line 41 on page 2 26 For Paperwork Reduction Act Notice, see the separate instructions Cat No 11344L Schedule E (Form 1040) 2017 Complete the Blacks' Form 8582 Note Only page 1 of the tax form is required Special instructions for Form 8582 If required, use the minus sign to enter a loss as a negative number on the lines 1d, 4, and 16 However, per the instructions on the tax return, enter all numbers in Part II as positive amounts Form 8582 Department of the Treasury Internal Revenue Service (99) Passive Activity Loss Limitations See separate instructions Attach to Form 1040 or Form 1041 Go to www irs gov Form8582 for instructions and the latest information OMB No 1545 1008 2017 Attachment Sequence No 88 Name(s) shown on return Walter and Skylar Black Identifying number 700 01 0002 Part I 2017 Passive Activity Loss Caution Complete Worksheets 1, 2, and 3 before completing Part I Rental Real Estate Activities With Active Participation (For the definition of active participation, see Special Allowance for Rental Real Estate Activities in the instructions ) 1a Activities with net income (enter the amount from Worksheet 1, column (a)) 1a b Activities with net loss (enter the amount from Worksheet 1, column (b)) 1b ( ) c Prior years' unallowed losses (enter the amount from Worksheet 1, column (c)) 1c ( ) d Combine lines 1a, 1b, and 1c 1d Commercial Revitalization Deductions From Rental Real Estate Activities 2a Commercial revitalization deductions from Worksheet 2, column (a) 2a ( ) b Prior year unallowed commercial revitalization deductions from Worksheet 2, column (b) 2b ( ) c Add lines 2a and 2b 2c ( ) All Other Passive Activities 3a Activities with net income (enter the amount from Worksheet 3, column (a)) 3a b Activities with net loss (enter the amount from Worksheet 3, column (b)) 3b ( ) c Prior years' unallowed losses (enter the amount from Worksheet 3, column (c)) 3c ( ) d Combine lines 3a, 3b, and 3c 3d 4 Combine lines 1d, 2c, and 3d If this line is zero or more, stop here and include this form with your return all losses are allowed, including any prior year unallowed losses entered on line 1c, 2b, or 3c Report the losses on the forms and schedules normally used 4 If line 4 is a loss and Line 1d is a loss, go to Part II Line 2c is a loss (and line 1d is zero or more), skip Part II and go to Part III Line 3d is a loss (and lines 1d and 2c are zero or more), skip Parts II and III and go to line 15 Caution If your filing status is married filing separately and you lived with your spouse at any time during the year, do not complete Part II or Part III Instead, go to line 15 Part II Special Allowance for Rental Real Estate Activities With Active Participation Note Enter all numbers in Part II as positive amounts See instructions for an example 5 Enter the smaller of the loss on line 1d or the loss on line 4 5 6 Enter $150,000 If married filing separately, see instructions 6 7 Enter modified adjusted gross income, but not less than zero (see instructions) 7 Note If line 7 is greater than or equal to line 6, skip lines 8 and 9, enter 0 on line 10 Otherwise, go to line 8 8 Subtract line 7 from line 6 8 9 Multiply line 8 by 50 (Enter the smaller of line 5 or line 9 5) Do not enter more than $25,000 If married filing separately, see instructions 9 10 Enter the smaller of line 5 or line 9 10 If line 2c is a loss, go to Part III Otherwise, go to line 15 Part III Special Allowance for Commercial Revitalization Deductions From Rental Real Estate Activities Note Enter all numbers in Part III as positive amounts See the example for Part II in the instructions 11 Enter $25,000 reduced by the amount, if any, on line 10 If married filing separately, see instructions 11 12 Enter the loss from line 4 12 13 Reduce line 12 by the amount on line 10 13 14 Enter the smallest of line 2c (treated as a positive amount), line 11, or line 13 14 Part IV Total Losses Allowed 15 Add the income, if any, on lines 1a and 3a and enter the total 15 16 Total losses allowed from all passive activities for 2017 Add lines 10, 14, and 15 See instructions to find out how to report the losses on your tax return 16 For Paperwork Reduction Act Notice, see instructions Cat No 63704F Form 8582 (2017)

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Comprehensive Problem 4-1 Skylar and Walter Black have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV

Comprehensive Problem 4-1

Skylar and Walter Black have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a homemaker and Walter is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002.

The Blacks incurred the following expenses during their move from Maine to Nevada in January of 2017:

Cost of moving furniture	$4,775
Travel (2,988 miles at $0.17)	508
Lodging en route	520
Meals en route	90
House-hunting trip before the move	750

The school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2. Walters previous job, as a high school teacher in Maine, was only 5 miles from his home. Skylar was unemployed prior to the move.

The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 183 days during 2017 and used by the Blacks for 17 days. Pertinent information about the condo rental is as follows:

Rental income	$16,000
Mortgage interest reported on Form 1098	8,600
Homeowners' association dues	5,200
Utilities	1,200
Maintenance	3,800
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.

Required: Complete Form 1040 and the schedules and forms provided for the Blacks.

If an amount box does not require an entry or the answer is zero, enter "0".

Do not round any percentages.

If required, round your answers to the nearest dollar.

If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers.

Note: Special instructions for Form 8582: If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Complete the Blacks' Schedule E.

SCHEDULE E (Form 1040) Department of the Treasury Internal Revenue Service (99)

Supplemental Income and Loss (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc.) Attach to Form 1040, 1040NR, or Form 1041. Go to www.irs.gov/ScheduleE for instructions and the latest information.

OMB No. 1545-0074

2017

Attachment Sequence No. 13

Name(s) shown on return Walter and Skylar Black

Your social security number 700-01-0002

Part I	Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C or C-EZ (see instructions). If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40.

A	Did you make any payments in 2017 that would require you to file Form(s) 1099? (see instructions)	Yes	No
B	If "Yes," did you or will you file required Forms 1099?	Yes	No

1a	Physical address of each property (street, city, state, ZIP code)
A	123 Buncombe Lane, Brian Head, UT 84719
B
C
1b	Type of Property (from list below)	2	For each rental real estate property listed above, report the number of fair rental and personal use days. Check the QJV box only if you meet the requirements to file as a qualified joint venture. See instructions.		Fair Rental Days	Personal Use Days	QJV
A	3			A
B				B
C				C

Type of Property:
1 Single Family Residence	3 Vacation/Short-Term Rental	5 Land	7 Self-Rental
2 Multi-Family Residence	4 Commercial	6 Royalties	8 Other (describe)

Income:		Properties:		A		B		C
3	Rents received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
4	Royalties received . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
Expenses:
5	Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5
6	Auto and travel (see instructions) . . . . . . . . . . . . . . . . .		6
7	Cleaning and maintenance . . . . . . . . . . . . . . . . . . . . . .		7
8	Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8
9	Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
10	Legal and other professional fees . . . . . . . . . . . . . . . . . .		10
11	Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11
12	Mortgage interest paid to banks, etc. (see instructions) . . .		12
13	Other interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13
14	Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		14
15	Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15
16	Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		16
17	Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17
18	Depreciation expense or depletion . . . . . . . . . . . . . . . . . .		18
19	Other (list)	Homeowners' Association Dues	19
20	Total expenses. Add lines 5 through 19 . . . . . . . . . . . . . .		20
21	Subtract line 20 from line 3 (rents) and/or 4 (royalties). If result is a (loss), see instructions to find out if you must file Form 6198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		21
22	Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) . . . . . . . . . . . . . . . . . . .		22	(	)	(	)	(	)
23a	Total of all amounts reported on line 3 for all rental properties . . . . . . . . . . . . . .				23a
b	Total of all amounts reported on line 4 for all royalty properties . . . . . . . . . . . . . .				23b
c	Total of all amounts reported on line 12 for all properties . . . . . . . . . . . . . . . . . . .				23c
d	Total of all amounts reported on line 18 for all properties . . . . . . . . . . . . . . . . . . .				23d
e	Total of all amounts reported on line 20 for all properties . . . . . . . . . . . . . . . . . . .				23e
24	Income. Add positive amounts shown on line 21. Do not include any losses . . . . . . . . . . . . . . . . . . .						24
25	Losses. Add royalty losses from line 21 and rental real estate losses from line 22. Enter total losses here						25	(	)
26	Total rental real estate and royalty income or (loss). Combine lines 24 and 25. Enter the result here. If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Form 1040, line 17, or Form 1040NR, line 18. Otherwise, include this amount in the total on line 41 on page 2 . . . . . . .						26

For Paperwork Reduction Act Notice, see the separate instructions.

Cat. No. 11344L

Schedule E (Form 1040) 2017

Complete the Blacks' Form 8582.

Note: Only page 1 of the tax form is required. Special instructions for Form 8582: If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4, and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Form 8582 Department of the Treasury Internal Revenue Service (99)

Passive Activity Loss Limitations See separate instructions. Attach to Form 1040 or Form 1041. Go to www.irs.gov/Form8582 for instructions and the latest information.

OMB No. 1545-1008

2017

Attachment Sequence No. 88

Name(s) shown on return Walter and Skylar Black

Identifying number

700-01-0002

Part I	2017 Passive Activity Loss
	Caution: Complete Worksheets 1, 2, and 3 before completing Part I.

Rental Real Estate Activities With Active Participation (For the definition of active participation, see Special Allowance for Rental Real Estate Activities in the instructions.)
1a	Activities with net income (enter the amount from Worksheet 1, column (a))		1a
b	Activities with net loss (enter the amount from Worksheet 1, column (b))		1b	(	)
c	Prior years' unallowed losses (enter the amount from Worksheet 1, column (c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1c	(	)
d	Combine lines 1a, 1b, and 1c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					1d
Commercial Revitalization Deductions From Rental Real Estate Activities
2a	Commercial revitalization deductions from Worksheet 2, column (a) . . . .		2a	(	)
b	Prior year unallowed commercial revitalization deductions from Worksheet 2, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2b	(	)
c	Add lines 2a and 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					2c	(	)
All Other Passive Activities
3a	Activities with net income (enter the amount from Worksheet 3, column (a))		3a
b	Activities with net loss (enter the amount from Worksheet 3, column (b))		3b	(	)
c	Prior years' unallowed losses (enter the amount from Worksheet 3, column (c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3c	(	)
d	Combine lines 3a, 3b, and 3c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					3d
4	Combine lines 1d, 2c, and 3d. If this line is zero or more, stop here and include this form with your return; all losses are allowed, including any prior year unallowed losses entered on line 1c, 2b, or 3c. Report the losses on the forms and schedules normally used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					4
	If line 4 is a loss and:	Line 1d is a loss, go to Part II. Line 2c is a loss (and line 1d is zero or more), skip Part II and go to Part III. Line 3d is a loss (and lines 1d and 2c are zero or more), skip Parts II and III and go to line 15.
Caution: If your filing status is married filing separately and you lived with your spouse at any time during the year, do not* complete Part II or Part III. Instead, go to line 15.*

Part II	Special Allowance for Rental Real Estate Activities With Active Participation
	Note: Enter all numbers in Part II as positive amounts. See instructions for an example.

5	Enter the smaller of the loss on line 1d or the loss on line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5
6	Enter $150,000. If married filing separately, see instructions . . . . . . . . . .	6
7	Enter modified adjusted gross income, but not less than zero (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
	Note: If line 7 is greater than or equal to line 6, skip lines 8 and 9, enter -0- on line 10. Otherwise, go to line 8.
8	Subtract line 7 from line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
9	Multiply line 8 by 50% (Enter the smaller of line 5 or line 9.5). Do not enter more than $25,000. If married filing separately, see instructions		9
10	Enter the smaller of line 5 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		10
	If line 2c is a loss, go to Part III. Otherwise, go to line 15.

Part III	Special Allowance for Commercial Revitalization Deductions From Rental Real Estate Activities
	Note: Enter all numbers in Part III as positive amounts. See the example for Part II in the instructions.

11	Enter $25,000 reduced by the amount, if any, on line 10. If married filing separately, see instructions	11
12	Enter the loss from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
13	Reduce line 12 by the amount on line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
14	Enter the smallest of line 2c (treated as a positive amount), line 11, or line 13 . . . . . . . . . . . . . .	14

Part IV

Total Losses Allowed

15	Add the income, if any, on lines 1a and 3a and enter the total. . . . . . . . . . . . . . . . . . . . . . . . . . .				15
16	Total losses allowed from all passive activities for 2017. Add lines 10, 14, and 15. See instructions to find out how to report the losses on your tax return . . . . . . . . . . . . . . . . . . . . . . .				16