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 Walt 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 2021, 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, 2021. They originally paid $75,000 for the home on July 3, 1996, but managed to sell it for $598,000. They spent $14,000 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 184 days during 2021 and used by the Blacks for 16 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:

Rental income	$25,000
Mortgage interest reported on Form 1098	16,000
Homeowners' association dues	5,200
Utilities	3,400
Maintenance	6,600
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. The Blacks received a $5,600 EIP in 2021.

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

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

b

Employer identification number (EIN) 31-1239867

1

Wages, tips, other compensation 54,500.00

2

Federal income tax withheld 3,100.00

c

Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169

3

Social security wages 54,500.00

4

Social security tax withheld 3,379.00

5

Medicare wages and tips 54,500.00

6

Medicare tax withheld 790.25

7

Social security tips

8

Allocated tips

d

Control number

9

10

Dependent care benefits

e

Employee's first name and initial Last name Walter Black 883 Scrub Brush Street, Apt. 52B Las Vegas, NV 89125

Suff.

11

Nonqualified plans

12a

See instructions for box 12

C o d e

DD

$7,900.00

13

Statutory employee	Retirement plan	Third-party sick pay

12b

C o d e

14

Other

12c

C o d e

12d

C o d e

f

Employee's address and ZIP code

15 State NV	Employer's state ID number	16	State wages, tips, etc.	17	State income tax	18	Local wages, tips, etc.	19	Local income tax	20	Locality name

Form W-2

Wage and Tax Statement

2021

Department of the TreasuryInternal Revenue Service

Copy BTo Be Filed With Employee's FEDERAL Tax Return.

This information is being furnished to the Internal Revenue Service.

The Blacks received the following 1099-DIV from their mutual fund investments:

CORRECTED (if checked)
PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. Cyber Equities Fund 41 Wall Street New York, NY 10005	1a Total ordinary dividends $ 1,414.00	OMB No. 1545-0110 2021 Form 1099-DIV	Dividends and Distributions
1b Qualified dividends $ 1,214.00
2a Total capital gain distr. $ 6,700.00	2b Unrecap. Sec. 1250 gain $	Copy B For Recipient 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 income is taxable and the IRS determines that it has not been reported.
PAYER'S TIN	RECIPIENT'S TIN	2c Section 1202 gain $	2d Collectibles (28%) gain $
17-1234326	222-43-7690	2e Section 897 ordinary dividends $	2f Section 897 capital gain $
RECIPIENT'S name Skylar B. Black	3 Nondividend distributions $	4 Federal income tax withheld $
	5 Section 199A dividends	6 Investment expenses
Street address (including apt. no.)	$	$
883 Scrub Brush St. #52B	7 Foreign tax paid	8 Foreign country or U.S. possession
City or town, state or province, country, and ZIP or foreign postal code	$
Las Vegas, NV 89125	9 Cash liquidation distributions $	10 Noncash liquidation distributions $
		FATCA filing requirement	11 Exempt-interest dividends $	12 Specified private activity bond interest dividends $
Account number (see instructions)	13 State	14 State identification no	15 State tax withheld $
			$

Form 1099-DIV

(keep for your records)

www.irs.gov/Form1099DIV

Department of the Treasury - Internal Revenue Service