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 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. 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 57,600 in 2018, the Blacks provide over half of Alton's support. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2018. They originally paid $76,000 for the home on July 3, 1993, 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 school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2 (see separate tab). Walter's 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 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 2018 and used by the Blacks for 16 days. Pertinent information about the condo rental is as follows: Rental income Mortgage interest reported on Form 1098 Homeowners' association dues Utilities Maintenance Depreciation (assume fully depreciated) $12,000 8,600 5,200 1,200 3,800 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. 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 "O". 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. Walter's earnings from teaching are: a Employee's social security number 700-01-0002 Safe, accurate, FAST! Use Visit the IRS website at www.lrs.gov/efile OMB No. 1545-0008 IRS e - file 1 Wages, tips, other compensation 50,900.00 Employer identification number (EIN) 31-1238967 Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169 3 Social security wages 50,900.00 2 Federal income tax withheld 4,320.00 4 Social security tax withheld 3,155.80 6 Medicare tax withheld 738.05 8 Allocated tips 5 Medicare wages and tips 50,900.00 7 Social security tips d Control number 9 Verification code 10 Dependent care benefits 12a See instructions for box 12 C O DD 7,800.00 Employee's first name and Suff. 11 Nonqualified plans initial Last name Walter Black 883 Scrub Brush Street, Apt # 52B Las Vegas, NV 89125 13 Statutory Retirement employee plan X 12b Third-party sick pay C d e 14 Other 1 2c 12d f Employee's address and ZIP code 15 State Employer's 16 State wages, tips, state ID etc. NV number 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Department of the Treasury-Internal Revenue Service Form W- Wage and Tax Statement 2 2018 2018 Dividends and Distributions 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 1a Total ordinary OMB No. 1545-0110 province, country, ZIP or foreign postal code, and dividends telephone no. $ 1,400.00 Cyber Funds Equities Fund 1bQualified dividends 41 Wall Street $ 998.00 Form 1099-DIV New York, NY 10005 2a Total capital gain 2bUnrecap. Sec. 1250 gain distr. $ $ 6,543.12 PAYER'S TIN RECIPIENT'S TIN 2cSection 1202 gain 2d Collectibles (28%) gain 17-1234326 222-43-7690 $ $ Copy B For Recipient RECIPIENT'S name 4Federal income tax withheld 3Nondividend distributions This is important tax information and is being furnished to the IRS. If you are required to file a Skylar B. Black $ 6 Investment expenses 5 Section 199A dividends $ $ Street address (including apt. no.) 883 Scrub Brush Street #52B City or town, state or province, country, and ZIP or foreign postal code 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. 7 Foreign tax paid 8Foreign country or U.S. possession $ 9Cash liquidation distributions 10Noncash liquidation distributions Las Vegas, NV 89125 $ $ FATCA filing 11Exempt-interest requirement dividends 12Specified private activity bond interest dividends $ Account number (see instructions) 13 State 14 State 15 State tax withheld identifications no Form 1099-DIV (keep for your records) www.lrs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service Complete Form 1040 for Walter and Skylar Black F Department of the Treasury Inbemal Revenue Service 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Married filing jointly Your first name and initial Walter Your standard deduction: None Last name Black Your social security number 700-01-0002 If joint return, Spouse's first name and initial Skylar Last name Black Spouse's social security number 222-43-7690 Full-year health care Spouse standard deduction: None Yes coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions, Apt. no. Presidential Election Campaign 883 Scrub Brush Street 52B (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Las Vegas, NV 89125 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) Vif qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents Rebecca Backin 411-66-2121 Mother No Yes Alton Black 343-22-8899 Father No Yes Sign Here Joint return? See instructions. Keep a copy for your records Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS Teacher sent you an Identity Protection PIN, enter it here (see inst. Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Homemaker If the IRS sent you an Identity Protection PIN, enter it here (see inst. Preparer's name Preparer's signature PTIN Firm's EIN Paid Preparer Use Only Check if: 3rd Party Designee Self-employed Firm's name Firm's address Phone no. For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2018) Form 1040 (2018) Walter and Skylar Black 700-01-0002 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2.... 1 2b 3a 3b 4b Attach Form(s) W-2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 5b 2a Tax- exempt 2 b Taxable interest interest Qualified dividends b Ordinary dividends 4a IRAS, pensions, 4a b Taxable amount and annuities 5a Social security 5a b Taxable amount benefits 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6.............. 8 Standard deduction or itemized deductions (from Schedule A)........... 9 Qualified business income deduction (see instructions) 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -O-.... 6 7 8 9 10 Standard Deduction for- Single or married filing separately, $12,000 Married filing jointly or Qualifying widow(er), $ 24,000 Head of household, $18,000 If you checked any box under Standard 11 11 a Tax (see inst) (check if any from: 10 Form(s) 8814 2 0 Form 4972 30 ) b Add any amount from Schedule 2 and check here .......... 12 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here .... 13 Subtract line 12 from line 11. If zero or less, enter-O- 14 Other taxes. Attach Schedule 4....... 12 13 14 15 Total tax. Add lines 13 and 14........ 15 16 deduction, see instructions. Federal income tax withheld from Forms W-2 and 1099. 16 17 18 17 Refundable credits: a EIC (see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments .... 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid ........................... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here.. Refund 19 20a Direct deposit? b Routing number c Type: Checking O Savings See instructions.d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 22 Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions ..... You Owe 23 Estimated tax penalty (see instructions)..... 23 Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018) Complete Schedule 1 for Walter and Skylar Black. SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income Department of the 2018 Treasury Internal Attach to Form 1040. Attachment Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Your social security number Walter and Skylar Black 700-01-0002 Additional 1-9b Reserved 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received 11 12 Business income or (loss). Attach Schedule C or C-EZ 12 13 Capital gain or (loss). Attach Schedule Dif required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S Corporations, trusts, etc. Attach Schedule E ........ 17 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation, 19 20a Reserved ..... 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and incluide on Form 1040, line 6. Otherwise, go to line 23 22 Adjustments 23 Educator expenses..... 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ............... 24 25 Health savings account deduction. Attach Form 8889.. 25 26 Moving expenses for members of the Armed Forces. Attach Form 3903.. 26 27 Deductible part of self-employment tax. Attach Schedule SE.. 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction .... 29 30 Penalty on early withdrawal of savings .. 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction .... 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 ............. 36 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 12 Business income or (loss). Attach Schedule C or C-EZ 12 13 Capital gain or (loss). Attach Schedule Dif required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S Corporations, trusts, etc. Attach Schedule E ........ 17 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation, 19 20a Reserved ..... 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and incluide on Form 1040, line 6. Otherwise, go to line 23 22 Adjustments 23 Educator expenses..... 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ............... 24 25 Health savings account deduction. Attach Form 8889.. 25 26 Moving expenses for members of the Armed Forces. Attach Form 3903.. 26 27 Deductible part of self-employment tax. Attach Schedule SE.. 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction .... 29 30 Penalty on early withdrawal of savings .. 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction .... 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 ............. 36 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 Capital Gains and Losses Complete the Blacks' Schedule D. SCHEDULE D OMB No. 1545-0074 (Form 1040) Department of the Attach to Form 1040 or Form 1040NR. 2018 Treasury Internal Go to www.irs.gov/Scheduled for instructions and the latest information. Attachment Revenue Service Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Sequence No. 12 (99) Name(s) shown on return Your social security number Walter and Skylar Black 700-01-0002 Part I Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines (9) (h) Gain or below. Adjustments to (loss) (d) (e) gain or loss from Subtract column This form may be easier to complete if you round off cents to whole Proceeds (sales Cost (or other Form(s) 8949, (e) from column (d) and combine dollars. price) basis) Part I, line 2 the result with column (g) column (g) la Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b .... 1b Totals for all transactions reported on Form(s) 8949 with Box A checked ............................ 2 Totals for all transactions reported on Form(5) 8949 with Box checked 3 Totals for all transactions reported on Form(s) 8949 with Box C checked ...................... 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824..... 4 5 Net short-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 5 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions .......... 6 0 7 Net short-term capital gain or loss). Combine lines 1a through 6 in column (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back.. 7 Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) See instructions for how to figure the amounts to enter on the lines (g) (h) Gain or below. (d) Adjustments to (loss) Proceeds (sales Cost (or other gain or loss from Subtract column price) basis) This form may be easier to complete if you round off cents to whole Form(s) 8949, (e) from column Part II, line 2, (d) and combine dollars. column (g) the result with column (g) Sa Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b.... 8b Totals for all transactions reported on Form(s) 8949 with Box D checked ....................... 9 Totals for all transactions reported on Form(s) 8949 with Box E checked ............................. 10 Totals for all transactions reported on Form(s) 8949 with Box F checked ........... 11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 11 4684, 6781, and 8824 .... 12 Net long-term gain or (loss) from partnerships, 5 corporations, estates, and trusts from Schedule(s) K-1 12 13 Capital gain distributions. See the instructions 13 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions ... 14 15 Net long-term capital gain or loss). Combine lines through 14 in column (h). Then go to Part III on the back 15 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H Schedule D (Form 1040) 2018 Walter and Skylar Black 700-01-0002 Page 2 Schedule D (Form 1040) 2018 Part III Summary 16 Combine lines 7 and 15 and enter the result 16 If line 16 is a gain, enter the amount from line 16 on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 17 below. If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. If line 16 is zero, skip lines 17 through 21 below and enter -O-on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 18 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet..... 19 20 Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14, the smaller of: loss on line 16; 21 0 } ,000), or if Tied filing arately, ($1,500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, line 3a, or Form 1040NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). No. Complete the rest of Form 1040 or Form 1040NR. Schedule D (Form 1040) 2018 Complete the Blacks' Form 8949, Form 8949 OMB No. 1545-0074 Sales and Other Dispositions of Capital Assets Department of Go to www.irs.gov/Form 8949 for instructions and the latest information. the Treasury 2018 File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Intemal Revenue Attachment Service Schedule D. Sequence No. 12A Name(s) shown on return Social security number or taxpayer identification number Walter 700-01-0002 and Skylar Black Before you check Box A, B, or C below, see whether you received any Form(s) 1099-5 or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long- term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) O(B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or loss. If you enter an amount in (h) (e) column (g), enter a code in column Gain or Cost or other (f). See the separate instructions. (a) (loss). Subtract (c) (d) basis. See Description of property Date acquired (b) Proceeds column (e) from Date sold or the Note below (Example: 100 sh. column (d) and disposed of (sales price) and (f) (g) (Mo., day, yr. (see XYZ Co.) combine the see Column Code(s) from Amount of (e) in the result with instructions adjustment column (9) separate instructions (Mo., day, y.) instructions) 2 Totals. Add the amounts in columns (d), (e), (9), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z Form 8949 (2018) Page 2 Form 8949 (2018) Attachment Sequence No. 12A Name(s) shown on return. Social security number or taxpayer identification number Name and SSN or taxpayer 700-01-0002 identification no. not required if shown on other side Walter and Skylar Black Before you check Box D, E, or F below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long-term (see instructions). For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B 1 Adjustment, if any, to gain or (h) loss. If you enter an amount in Gain or (b) column (9), enter a code in (loss). Subtract (a) (d) Description of property (Mo., day, yr.) Date acquired Cost or other Date sold or Proceeds (sales column (f). See the separate column (e) from basis. See instructions. column (d) and (Example: 100 sh. XYZ Co.) disposed of (Mo., day, yr.) price) (see the Note below instructions) and see Column (e) in the separate instructions (f) Code(s) from instructions (g) Amount of adjustment combine the result with column (g) Maine principal residence 07/03/93 01/04/18 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 8b (if Box D above is checked), line 9 (if Box & above is checked), or line 10 (if Box F above is checked) Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (9) in the separate instructions for how to figure the amount of the adjustment Form 8949 (2018) Complete the Blacks' Schedule E. SCHEDULE EN OMB No. 1545-0074 (Form 1040) Supplemental Income and Loss Department of the (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICS, 2018 Treasury Internal etc.) Revenue Service Attach to Form 1040, 1040NR, or Form 1041. Attachment (99) Go to www.irs.gov/Schedule for instructions and the latest information. Sequence No. 13 Name(s) shown on return Your social security number Walter and Skylar Black 700-01-0002 Part II Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule Cor 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 2018 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 O No 1a Physical address of each property (street, city, state, ZIP code) A 123 Buncombe Lane, Brian Head, UT 84719 B Fair Rental Days Personal Use Days QJV I C 1b Type of Property 2 (from list below) For each rental real estate property listed above, report the number of fair A rental and personal use days. Check A the QJV box only if you meet the B requirements to file as a qualified joint B venture. See instructions. Type of Property: 1 Single Family Residence 3 Vacation/Short-Term Rental 5 Land 2 Multi-Family Residence 4 Commercial 6 Royalties Income: Properties: 3 Rents received 3 4 Royalties received 4 Expenses: 5 Advertising .... 5 6 Auto and travel (see instructions) 6 7 Self-Rental 8 Other (describe) A B 7 8 9 7 Cleaning and maintenance 8 Commissions 9 Insurance. 10 Legal and other professional fees 11 Management fees 12 Mortgage interest paid to banks, etc. (see instructions) 10 11 12 13 Other interest ... 13 14 14 Repairs 15 Supplies 16 Taxes. 15 16 Utilities ........ 17 18 Depreciation expense or depletion 18 Homeowners 19 19 Other (list) dues 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 ...... b Total of all amounts reported on line 4 for all royalty properties .. c Total of all amounts reported on line 12 for all properties ..... d Total of all amounts reported on line 18 for all properties ......... e Total of all amounts reported on line 20 for all properties ................... DC 23a 23b 23c 23d 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 Schedule 1 (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) 2018 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. OMB No. 1545-1008 Form 8582 Passive Activity Loss Limitations Department of the See separate instructions. 2018 Treasury Internal Attach to Form 1040 or Form 1041. Attachment Revenue Service Go to www.irs.gov/Form8582 for instructions and the latest information. Sequence No. 88 (99) Name(s) shown on return Identifying number Walter and Skylar Black 700-01-0002 Part I 2018 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.) la Activities with net income (enter the amount from Worksheet 1, column (a)) 1a Activities with net loss (enter the amount from b 1b Worksheet 1, column (b)) c Prior years' unallowed losses (enter the amount from Worksheet 1, column (c)) 1c 1d d Combine lines 1a, 1b, and ic............. Commercial Revitalization Deductions From Rental Real Estate Activities 2a Commercial revitalization deductions from 2a Worksheet 2 column (a).... b Prior year unallowed commercial revitalization deductions from Worksheet 2, column (b) 2b c Add lines 2a and 2b.. All Other Passive Activities 3a Activities with net income (enter the amount from Worksheet 3, column (a)) 3a Activities with net loss (enter the amount from b 3b Worksheet 3, column (b)) 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 ... If line 4 is a lass and: Line id 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 hling status is married Nling 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 6 Enter $150,000. If married filing separately, see instructions .......... Enter modified adjusted gross income, but not less than zero (see instructions)... 7 7 Note: If fine 7 is greater than or equal to line 6, skip lines 8 and 9, enter -- on line 10. Otherwise, go to line 8. Subtract line 7 from line 6.... 8 9 Multiply line 8 by 50% (0.5). Do not enter more than $25,000. If married filing separately, see instructions 9 10 10 Enter the smaller of line 5 or line 9.. 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 12 Enter the loss from line 4.... 13 Reduce line 12 by the amount on line 10 14 Enter the smallest of line 2c (treated as a positive amount), line 11, or line 13.............. Part IV Total Losses Allowed 11 12 13 14 15 15 Add the income, if any, on lines 1a and 3a and enter the total. ..... ...... 16 Total losses allowed from all passive activities for 2018. Add lines 10, 14, and 15. See instructions to find out how to report the losses on your tax return .................. For Paperwork Reduction Act Notice, see instructions. Cat. Na, 63704F 16 Form 8582 (2018) Complete the Walter and Skylar Black's Qualified Dividends and Capital Gain Tax Worksheet. Qualified Dividends and Capital Gain Tax Worksheet-Line 11a Keep for Your Records Before you begin: See the earlier instructions for line 11a to see if you can use this worksheet to figure your tax. Before completing this worksheet, complete Form 1040 through line 10. If you don't have to file Schedule D and you received capital gain distributions, be sure you checked the box on line 13 of Schedule 1. 1. Enter the amount from Form 1040, line 10. However, if you are filing Form 2555 or 2555-EZ (relating to foreign earned income), enter the amount from line 3 of the Foreign Earned Income Tax Worksheet... 1. 2. Enter the amount from Form 1040, line 3a* .......... 2. 3. Are you filing Schedule D?* Enter the smaller of line 15 or 16 of Schedule D. If either line 15 or line 16 is blank or a loss, enter -O- 3. Enter the amount from Schedule 1, line 13 4. Add lines 2 and 3 4. 5. If filing Form 4952 (used to figure investment interest expense deduction), enter any amount from line 4g of that form. Otherwise, enter -0-.... .................. 5. 6. Subtract line 5 from line 4. If zero or less, enter -- 6. 7. 7. Subtract line 6 from line 1. If zero or less, enter -- 8. Enter: $38,600 if single or married filing separately, $77,200 if married filing jointly or qualifying widow(er), $51,700 if head of household. 9. Enter the smaller of line 1 or line 3 8. 9. 10. Enter the smaller of line 7 or line 9 10. 11. Subtract line 10 from line 9. This amount is taxed at 0% 11. 12. Enter the smaller of line 1 or line 6 12. 13. Enter the amount from line 11 . 13. 14. 15. 14. Subtract line 13 from line 12 15. Enter: $425,800 if single, $239,500 if married filing separately, $479,000 if married filing jointly or qualifying widow(er), $452,400 if head of household. 16. Enter the smaller of line 1 or line 15 16. 17. Add lines 7 and 11 17. 18. Subtract line 17 from line 16. If zero or less, enter -- 18. 19. Enter the smaller of line 14 or line 13 19. 20. Multiply line 19 by 15% (0.15) 20. 21. Add lines 11 and 19 21. 22. Subtract line 21 from line 12 22. 23. Multiply line 22 by 20% (0.20). 23. 24. Figure the tax on the amount on line 7. If the amount on line 7 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet ... 24. 25. Add lines 20, 23, and 24 25. 26. Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet .......... 26. 27. Tax on all taxable income. Enter the smaller of line 25 or line 26. Also include this amount on the entry space on Form 1040, line 11a. If you are filing Form 2555 or 2555-EZ, don't enter this amount on the entry space on Form 1040, line 11a. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet. 27. If you are filing Form 2555 or 2555-EZ, see the footnote in the Foreign Earned Income Tax Worksheet before completing this line. 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 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. 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 57,600 in 2018, the Blacks provide over half of Alton's support. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2018. They originally paid $76,000 for the home on July 3, 1993, 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 school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2 (see separate tab). Walter's 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 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 2018 and used by the Blacks for 16 days. Pertinent information about the condo rental is as follows: Rental income Mortgage interest reported on Form 1098 Homeowners' association dues Utilities Maintenance Depreciation (assume fully depreciated) $12,000 8,600 5,200 1,200 3,800 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. 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 "O". 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. Walter's earnings from teaching are: a Employee's social security number 700-01-0002 Safe, accurate, FAST! Use Visit the IRS website at www.lrs.gov/efile OMB No. 1545-0008 IRS e - file 1 Wages, tips, other compensation 50,900.00 Employer identification number (EIN) 31-1238967 Employer's name, address, and ZIP code Las Vegas School District 2234 Vegas Valley Drive Las Vegas, NV 89169 3 Social security wages 50,900.00 2 Federal income tax withheld 4,320.00 4 Social security tax withheld 3,155.80 6 Medicare tax withheld 738.05 8 Allocated tips 5 Medicare wages and tips 50,900.00 7 Social security tips d Control number 9 Verification code 10 Dependent care benefits 12a See instructions for box 12 C O DD 7,800.00 Employee's first name and Suff. 11 Nonqualified plans initial Last name Walter Black 883 Scrub Brush Street, Apt # 52B Las Vegas, NV 89125 13 Statutory Retirement employee plan X 12b Third-party sick pay C d e 14 Other 1 2c 12d f Employee's address and ZIP code 15 State Employer's 16 State wages, tips, state ID etc. NV number 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Department of the Treasury-Internal Revenue Service Form W- Wage and Tax Statement 2 2018 2018 Dividends and Distributions 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 1a Total ordinary OMB No. 1545-0110 province, country, ZIP or foreign postal code, and dividends telephone no. $ 1,400.00 Cyber Funds Equities Fund 1bQualified dividends 41 Wall Street $ 998.00 Form 1099-DIV New York, NY 10005 2a Total capital gain 2bUnrecap. Sec. 1250 gain distr. $ $ 6,543.12 PAYER'S TIN RECIPIENT'S TIN 2cSection 1202 gain 2d Collectibles (28%) gain 17-1234326 222-43-7690 $ $ Copy B For Recipient RECIPIENT'S name 4Federal income tax withheld 3Nondividend distributions This is important tax information and is being furnished to the IRS. If you are required to file a Skylar B. Black $ 6 Investment expenses 5 Section 199A dividends $ $ Street address (including apt. no.) 883 Scrub Brush Street #52B City or town, state or province, country, and ZIP or foreign postal code 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. 7 Foreign tax paid 8Foreign country or U.S. possession $ 9Cash liquidation distributions 10Noncash liquidation distributions Las Vegas, NV 89125 $ $ FATCA filing 11Exempt-interest requirement dividends 12Specified private activity bond interest dividends $ Account number (see instructions) 13 State 14 State 15 State tax withheld identifications no Form 1099-DIV (keep for your records) www.lrs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service Complete Form 1040 for Walter and Skylar Black F Department of the Treasury Inbemal Revenue Service 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Married filing jointly Your first name and initial Walter Your standard deduction: None Last name Black Your social security number 700-01-0002 If joint return, Spouse's first name and initial Skylar Last name Black Spouse's social security number 222-43-7690 Full-year health care Spouse standard deduction: None Yes coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions, Apt. no. Presidential Election Campaign 883 Scrub Brush Street 52B (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Las Vegas, NV 89125 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) Vif qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents Rebecca Backin 411-66-2121 Mother No Yes Alton Black 343-22-8899 Father No Yes Sign Here Joint return? See instructions. Keep a copy for your records Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS Teacher sent you an Identity Protection PIN, enter it here (see inst. Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Homemaker If the IRS sent you an Identity Protection PIN, enter it here (see inst. Preparer's name Preparer's signature PTIN Firm's EIN Paid Preparer Use Only Check if: 3rd Party Designee Self-employed Firm's name Firm's address Phone no. For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2018) Form 1040 (2018) Walter and Skylar Black 700-01-0002 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2.... 1 2b 3a 3b 4b Attach Form(s) W-2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 5b 2a Tax- exempt 2 b Taxable interest interest Qualified dividends b Ordinary dividends 4a IRAS, pensions, 4a b Taxable amount and annuities 5a Social security 5a b Taxable amount benefits 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6.............. 8 Standard deduction or itemized deductions (from Schedule A)........... 9 Qualified business income deduction (see instructions) 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -O-.... 6 7 8 9 10 Standard Deduction for- Single or married filing separately, $12,000 Married filing jointly or Qualifying widow(er), $ 24,000 Head of household, $18,000 If you checked any box under Standard 11 11 a Tax (see inst) (check if any from: 10 Form(s) 8814 2 0 Form 4972 30 ) b Add any amount from Schedule 2 and check here .......... 12 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here .... 13 Subtract line 12 from line 11. If zero or less, enter-O- 14 Other taxes. Attach Schedule 4....... 12 13 14 15 Total tax. Add lines 13 and 14........ 15 16 deduction, see instructions. Federal income tax withheld from Forms W-2 and 1099. 16 17 18 17 Refundable credits: a EIC (see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments .... 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid ........................... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here.. Refund 19 20a Direct deposit? b Routing number c Type: Checking O Savings See instructions.d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 22 Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions ..... You Owe 23 Estimated tax penalty (see instructions)..... 23 Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018) Complete Schedule 1 for Walter and Skylar Black. SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income Department of the 2018 Treasury Internal Attach to Form 1040. Attachment Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Your social security number Walter and Skylar Black 700-01-0002 Additional 1-9b Reserved 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received 11 12 Business income or (loss). Attach Schedule C or C-EZ 12 13 Capital gain or (loss). Attach Schedule Dif required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S Corporations, trusts, etc. Attach Schedule E ........ 17 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation, 19 20a Reserved ..... 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and incluide on Form 1040, line 6. Otherwise, go to line 23 22 Adjustments 23 Educator expenses..... 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ............... 24 25 Health savings account deduction. Attach Form 8889.. 25 26 Moving expenses for members of the Armed Forces. Attach Form 3903.. 26 27 Deductible part of self-employment tax. Attach Schedule SE.. 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction .... 29 30 Penalty on early withdrawal of savings .. 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction .... 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 ............. 36 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 12 Business income or (loss). Attach Schedule C or C-EZ 12 13 Capital gain or (loss). Attach Schedule Dif required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S Corporations, trusts, etc. Attach Schedule E ........ 17 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation, 19 20a Reserved ..... 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and incluide on Form 1040, line 6. Otherwise, go to line 23 22 Adjustments 23 Educator expenses..... 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ............... 24 25 Health savings account deduction. Attach Form 8889.. 25 26 Moving expenses for members of the Armed Forces. Attach Form 3903.. 26 27 Deductible part of self-employment tax. Attach Schedule SE.. 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction .... 29 30 Penalty on early withdrawal of savings .. 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction .... 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 ............. 36 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 Capital Gains and Losses Complete the Blacks' Schedule D. SCHEDULE D OMB No. 1545-0074 (Form 1040) Department of the Attach to Form 1040 or Form 1040NR. 2018 Treasury Internal Go to www.irs.gov/Scheduled for instructions and the latest information. Attachment Revenue Service Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Sequence No. 12 (99) Name(s) shown on return Your social security number Walter and Skylar Black 700-01-0002 Part I Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines (9) (h) Gain or below. Adjustments to (loss) (d) (e) gain or loss from Subtract column This form may be easier to complete if you round off cents to whole Proceeds (sales Cost (or other Form(s) 8949, (e) from column (d) and combine dollars. price) basis) Part I, line 2 the result with column (g) column (g) la Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b .... 1b Totals for all transactions reported on Form(s) 8949 with Box A checked ............................ 2 Totals for all transactions reported on Form(5) 8949 with Box checked 3 Totals for all transactions reported on Form(s) 8949 with Box C checked ...................... 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824..... 4 5 Net short-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1 5 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions .......... 6 0 7 Net short-term capital gain or loss). Combine lines 1a through 6 in column (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back.. 7 Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) See instructions for how to figure the amounts to enter on the lines (g) (h) Gain or below. (d) Adjustments to (loss) Proceeds (sales Cost (or other gain or loss from Subtract column price) basis) This form may be easier to complete if you round off cents to whole Form(s) 8949, (e) from column Part II, line 2, (d) and combine dollars. column (g) the result with column (g) Sa Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b.... 8b Totals for all transactions reported on Form(s) 8949 with Box D checked ....................... 9 Totals for all transactions reported on Form(s) 8949 with Box E checked ............................. 10 Totals for all transactions reported on Form(s) 8949 with Box F checked ........... 11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 11 4684, 6781, and 8824 .... 12 Net long-term gain or (loss) from partnerships, 5 corporations, estates, and trusts from Schedule(s) K-1 12 13 Capital gain distributions. See the instructions 13 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions ... 14 15 Net long-term capital gain or loss). Combine lines through 14 in column (h). Then go to Part III on the back 15 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H Schedule D (Form 1040) 2018 Walter and Skylar Black 700-01-0002 Page 2 Schedule D (Form 1040) 2018 Part III Summary 16 Combine lines 7 and 15 and enter the result 16 If line 16 is a gain, enter the amount from line 16 on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 17 below. If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. If line 16 is zero, skip lines 17 through 21 below and enter -O-on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 18 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet..... 19 20 Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14, the smaller of: loss on line 16; 21 0 } ,000), or if Tied filing arately, ($1,500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, line 3a, or Form 1040NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). No. Complete the rest of Form 1040 or Form 1040NR. Schedule D (Form 1040) 2018 Complete the Blacks' Form 8949, Form 8949 OMB No. 1545-0074 Sales and Other Dispositions of Capital Assets Department of Go to www.irs.gov/Form 8949 for instructions and the latest information. the Treasury 2018 File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Intemal Revenue Attachment Service Schedule D. Sequence No. 12A Name(s) shown on return Social security number or taxpayer identification number Walter 700-01-0002 and Skylar Black Before you check Box A, B, or C below, see whether you received any Form(s) 1099-5 or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long- term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) O(B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or loss. If you enter an amount in (h) (e) column (g), enter a code in column Gain or Cost or other (f). See the separate instructions. (a) (loss). Subtract (c) (d) basis. See Description of property Date acquired (b) Proceeds column (e) from Date sold or the Note below (Example: 100 sh. column (d) and disposed of (sales price) and (f) (g) (Mo., day, yr. (see XYZ Co.) combine the see Column Code(s) from Amount of (e) in the result with instructions adjustment column (9) separate instructions (Mo., day, y.) instructions) 2 Totals. Add the amounts in columns (d), (e), (9), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z Form 8949 (2018) Page 2 Form 8949 (2018) Attachment Sequence No. 12A Name(s) shown on return. Social security number or taxpayer identification number Name and SSN or taxpayer 700-01-0002 identification no. not required if shown on other side Walter and Skylar Black Before you check Box D, E, or F below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long-term (see instructions). For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B 1 Adjustment, if any, to gain or (h) loss. If you enter an amount in Gain or (b) column (9), enter a code in (loss). Subtract (a) (d) Description of property (Mo., day, yr.) Date acquired Cost or other Date sold or Proceeds (sales column (f). See the separate column (e) from basis. See instructions. column (d) and (Example: 100 sh. XYZ Co.) disposed of (Mo., day, yr.) price) (see the Note below instructions) and see Column (e) in the separate instructions (f) Code(s) from instructions (g) Amount of adjustment combine the result with column (g) Maine principal residence 07/03/93 01/04/18 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 8b (if Box D above is checked), line 9 (if Box & above is checked), or line 10 (if Box F above is checked) Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (9) in the separate instructions for how to figure the amount of the adjustment Form 8949 (2018) Complete the Blacks' Schedule E. SCHEDULE EN OMB No. 1545-0074 (Form 1040) Supplemental Income and Loss Department of the (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICS, 2018 Treasury Internal etc.) Revenue Service Attach to Form 1040, 1040NR, or Form 1041. Attachment (99) Go to www.irs.gov/Schedule for instructions and the latest information. Sequence No. 13 Name(s) shown on return Your social security number Walter and Skylar Black 700-01-0002 Part II Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule Cor 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 2018 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 O No 1a Physical address of each property (st