Comprehensive Problem 4-2B

Professor Patricia (Patty) Pt is retired from the Palm Springs Culinary Arts Academy (PSCAA). She is a single taxpayer and is 68 years old. Patty lives at 98 Colander Street, Henderson, NV 89052. Professor Pt's Social Security number is 565-66-9378. Patty receives monthly retirement benefits from her PSCAA retirement plan.

Earnings and income tax withholding shown on her retirement 2017 Form 1099-R are: Gross distribution and taxable amount $62,100 Federal tax withheld 7,350 State tax withheld 0

Patricia owns a rental condo located at 392 Spatula Way, Mount Charleston, NV 89124. The condo rents for $850 per month and was rented for the entire year. The following are the related expenses for the rental house:

Real estate taxes $3,835

Mortgage interest 8,613

Insurance 561 Depreciation (assume fully depreciated) 0

Homeowners' Association dues 1,260

Repairs 1,195

Gardening 560

The condo was purchased on August 31, 1979. Professor Pt handles all rental activities (e.g., rent collection, finding tenants, etc.) herself.

During March 2017, Patricia took a $82,000 distribution from her 401(k) plan. Patricia received only $65,600 because the 401(k) plan administrators withheld $16,400 federal income tax from the distribution. Forty-five days after the distribution, Patricia deposited $58,000 in a rollover IRA, keeping $7,600 of the $65,600 received in order to remodel her kitchen.

Required: Complete Form 1040 and the schedules and forms provided for Patty. 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 amounts to the nearest dollar. Enter all amounts as positive numbers except for the following special instructions: If required, on Form 1040, line 17 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 and 4. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Need assistance in filling out the 1040 form Lines 7-37