Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comprehensive Problem 4-2A Dr. Theodore E. Lariat is a single taxpayer born on September 22, 1973. He lives at 45 Mountain View Dr., Apt. 321,

Comprehensive Problem 4-2A

Dr. Theodore E. Lariat is a single taxpayer born on September 22, 1973. He lives at 45 Mountain View Dr., Apt. 321, Spokane, WA 99210. Dr. Lariat's Social Security number is 775-88-9530. Dr. Lariat works for the Pine Medical Group, and his earnings and income tax withholding for 2021 are reported on the W-2 form (see separate tab).

Dr. Lariat owns a rental house located at 672 Lake Street, Spokane, WA 99212. The house rents for $1,000 per month and was rented for the entire year. The following are the related expenses for the rental house:

Real estate taxes $6,000
Mortgage interest 14,500
Insurance 2,200
Depreciation (assume fully depreciated) 0
Repairs 600
Maintenance 2,000

The house was purchased on July 5, 1986. Dr. Lariat handles all rental activities (e.g., rent collection, finding tenants, etc.) himself. He spends about 10 hours per month on the rental.

In 2021, Dr. Lariat sold his primary residence as he wished to move to an apartment to avoid the maintenance and upkeep of a single-family home. Dr. Lariat's home sold on February 12, 2021 for $345,000 net after commissions. He acquired the home on June 3, 2003 for $260,000 and had made improvements of $10,000.

Dr. Lariat did not receive an EIP in 2021.

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

  • The taxpayer had health coverage for the entire year.
  • The taxpayer does not want to make contribution to the presidential election campaign.
  • Do not complete Form 4562 for reporting depreciation.
  • Make realistic assumptions about any missing data.
  • If an amount box does not require an entry or the answer is zero, enter "0".
  • If required, round any amount to the nearest dollar.
  • Enter all amounts as positive numbers except for the following special instructions: If required, on Form 1040, line 7a and on Schedule E, on lines 21, 25, and 26, use the minus sign to indicate a loss.
  • On Form 8582, if required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4, 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Dr. Lariat's W-2 Form

Question Content Area

Dr. Lariat's W-2 from the Pine Medical Group is below.

a Employee's social security number 775-88-9530 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) 36-1389676 1 Wages, tips, other compensation 125,000.00 2 Federal income tax withheld 20,000.00
c Employer's name, address, and ZIP code Pine Medical Group 800 W. 7th Ave. Spokane, WA 92204 3 Social security wages 125,000.00 4 Social security tax withheld 7,750.00
5 Medicare wages and tips 125,000.00 6 Medicare tax withheld 1,812.25
7 Social security tips 8 Allocated tips
d Control number 9 10 Dependent care benefits
e Employee's first name and initial Last name George Lariat 45 Mountain View Drive Apt 321 Spokane, WA 99210 Suff. 11 Nonqualified plans 12a See instructions for box 12
C o d e DD 5,800.00
13
Statutory employee Retirement plan Third-party sick pay
12b
C o d e
14 Other

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Preppers Financial Guide

Authors: Jim Cobb

1st Edition

1612434037, 978-1612434032

More Books

Students also viewed these Finance questions