Comprehensive Problem 4-1

Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a stay-at-home parent 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. Neither are age 65 or older. 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 2019, the Blacks provide over half of Alton's support. Skylar and Walt claim a $500 other dependent credit each for Rebecca and Alton.

Walts earnings from teaching are included on the W-2 (see separate tab).

The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2019. They originally paid $76,000 for the home on July 3, 1994, but managed to sell it for $604,000. They spent $13,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home.

The Blacks received a 1099-DIV from their mutual fund investments (see separate tab).

The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 185 days during 2019 and used by the Blacks for 15 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:

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.

• Assume the taxpayers had health coverage for the entire year.
• Neither taxpayers wants to contribute to the presidential election campaign.
• 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.
• 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.

Required:

2019 Walter's Forms W-2 and 1099-DIV 2019 Form 1040 2019 Schedule 1, Schedule D, Form 8949 and Schedule E

2019 Form 8582, Qualified Dividends and Capital Gain Tax Worksheet and Tax Table.

Rental income Mortgage interest reported on Form 1098 Homeowners' association dues $12,100 8,600 5,200 1,200 3,800 Utilities Maintenance Depreciation (assume fully depreciated) Walter's Forms W-2 and 1099-DIV Walter's earnings from teaching are: a Employee's social security number 700-01-0002 OMB No. 1545-0008 Safe, accurate, FAST! Use IRS e file Visit the IRS website at www.irs.gov/efile 2 b Employer identification number (EIN) 31-1239867 1 Wages, tips, other compensation 51,200.00 Federal income tax withheld 4,310.00 4 3 Social security wages 51,200.00 Social security tax withheld 3,174.40 c Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169 6 5 Medicare wages and tips 51,200.00 Medicare tax withheld 742.40 7 Social security tips 8 Allocated tips d Control number 10 Dependent care benefits Suff. 11 Nonqualified plans 12a See instructions for box 12 e Employee's first name and initial Last name Walter Black 883 Scrub Brush Street, Apt 52B Las Vegas, NV 89125 DD $7,900.00 12b 13 Statutory employee Retirement Third-party plan sick pay OMB No. 1545-0110 PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. la Total ordinary dividends $ 1,425.00 2019 Dividends and Distributions Cyber Funds Equities Fund 41 Wall Street New York, NY 10005 1b Qualified dividends $ 1,002.00 Form 1099-DIV 2a Total capital gain distr. 2b Unrecap. Sec. 1250 gain $ 6,540.34 PAYER'S TIN RECIPIENT'S TIN 2c Section 1202 gain | 2d Collectibles (28%) gain 17-1234326 222-43-7690 RECIPIENT'S name 3 Nondividend distributions 4 Federal income tax withheld Copy B Skylar B. Black For Recipient 6 Investment expenses 5 Section 199A dividends Street address (including apt. no.) 7 Foreign tax paid This is important tax information and is being furnished to the IRS. If you are required to file 8 Foreign country or U.S. possession 883 Scrub Brush Street #52B Rental income Mortgage interest reported on Form 1098 Homeowners' association dues $12,100 8,600 5,200 1,200 3,800 Utilities Maintenance Depreciation (assume fully depreciated) Walter's Forms W-2 and 1099-DIV Walter's earnings from teaching are: a Employee's social security number 700-01-0002 OMB No. 1545-0008 Safe, accurate, FAST! Use IRS e file Visit the IRS website at www.irs.gov/efile 2 b Employer identification number (EIN) 31-1239867 1 Wages, tips, other compensation 51,200.00 Federal income tax withheld 4,310.00 4 3 Social security wages 51,200.00 Social security tax withheld 3,174.40 c Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169 6 5 Medicare wages and tips 51,200.00 Medicare tax withheld 742.40 7 Social security tips 8 Allocated tips d Control number 10 Dependent care benefits Suff. 11 Nonqualified plans 12a See instructions for box 12 e Employee's first name and initial Last name Walter Black 883 Scrub Brush Street, Apt 52B Las Vegas, NV 89125 DD $7,900.00 12b 13 Statutory employee Retirement Third-party plan sick pay OMB No. 1545-0110 PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. la Total ordinary dividends $ 1,425.00 2019 Dividends and Distributions Cyber Funds Equities Fund 41 Wall Street New York, NY 10005 1b Qualified dividends $ 1,002.00 Form 1099-DIV 2a Total capital gain distr. 2b Unrecap. Sec. 1250 gain $ 6,540.34 PAYER'S TIN RECIPIENT'S TIN 2c Section 1202 gain | 2d Collectibles (28%) gain 17-1234326 222-43-7690 RECIPIENT'S name 3 Nondividend distributions 4 Federal income tax withheld Copy B Skylar B. Black For Recipient 6 Investment expenses 5 Section 199A dividends Street address (including apt. no.) 7 Foreign tax paid This is important tax information and is being furnished to the IRS. If you are required to file 8 Foreign country or U.S. possession 883 Scrub Brush Street #52B