Comprehensive Tax Problem Joseph and Diane Smith 1580 West Street Chatham, VA 24531 Joseph and Diane are both 35 and have no dependents. If your clients receive a refund, they want the full amount refunded to them. Diane is currently pregnant and will give birth during the next tax year. Joseph - SSN: 400-20-0100 Diane - SSN: 200-40-8000 Joseph works as a salesman. During the current year, Joseph earned a total compensation from his job of $125,000. Following are the deductions from his pay. Federal Withholding $20,000 FICA (Social Security) Withholding $ 7,347 Medicare $ 1,813 Virginia Withholding $ 4,000 Diane is a nurse and earned total compensation of $45,400. Following are the deductions from her pay. Federal Withholding $ 5,000 FICA (Social Security) Withholding $ 2,815 Medicare $ 658 Virginia Withholding $ 2,000 Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Long Term Capital Gain $ 4,900 Long Term Capital Loss $(3,200) Short Term Capital Gain $ Short Term Capital Loss $(7,800) They have no loss carryover from previous years. Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising $175 Supplies Legal Fees $750 Liability Insurance $600 $500 The couple have the following additional expenses for the year: Health Insurance (after-tax) $ 4,400 Doctor bills $ 470 Real estate taxes $ 2,200 Personal property taxes 400 Mortgage Interest $15,600 Charitable contributions - cash 9,000 Charitable contributions - Stock GE stack owed 5.vears. Imalat M tonn Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising $175 Supplies $500 Legal Fees $750 Liability Insurance $600 The couple have the following additional expenses for the year: Health Insurance (after-tax) $ 4,400 Doctor bills $ 470 Real estate taxes $ 2,200 Personal property taxes $ 400 Mortgage Interest $15,600 Charitable contributions - cash 9,000 Charitable contributions - Stock GE stock owed 5 years: Fair Market Value (FMV) $ 8,000 Adjusted basis 2,000 Tax preparation fees 750 Note: Ignore any potential qualified business income deduction for the purposes of this project Use the information provided below to complete the Schedule D form. Remember to complete the taxpayer information at the top of the form. Comprehensive Tax Problem Update your 1040 form for this new information. Complete the taxpayer information section at the top of the form Enter the appropriate information in Part I and Part II Check the appropriate boxes in Part III - the taxpayers have no foreign interests Submit your Schedule D Enter the Gain or Loss from Schedule D to Form 1040 Line 6 4 SCHEDULED OMSN 1545-0074 Form 1040 or 104-SRI Capital Gains and Losses Attach to Form 1040, 040-SR, or 1040-NR. 2019 Department of the Treasury Go to www.irs.gov/Scheduled for instructions and the latest information Revenue Service Use Form 8949 to list your transactions for lines 1b, 2, 3, 8, 9 and 10. Com 12 Name shown on retum Your social security number Did you dispose of any investments in a qualified opportunity fund during the tax year? Yes No "Yes"attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss Part 1 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 Nainor lines below. A strat com Proceed som ho con This form may be easier to complete if you round off cents to for other word. Partner whole dollars in2.com who 1a 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, love this line blank and go to line 1b 1b Totals for all transactions reported on Forms) 8949 with Box A checked 2 Totals for all transactions reported on Formis) 8949 with Box Bchecked. 3 Totals for all transactions reported on Form) 1949 with Box C checked 4 Short-term gain from Form 6252 and short-term gain or loss) from Forms 4684.6781, and 8824 5 Net short-term gain or loss from partnerships, Scorporations, states, and trusts from Schedules) 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 7 Net short-term capital gain or loss). Combine lines ta through 6 in column h, you have any long- term capital gains or losses, go to Part It below. Otherwise, go to Part Ill on the back 7 Partill Long-Term Capital Gains and Losses - Generally Assets Held More Than One Year (see instructions Soo instructions for how to figure the amounts to enter on the lines below. S Proceed This form may be easier to complete If you round off cents to from from whole dollars prio for other formats correth line 2 8a Totals for all long-term transaction reported on Form 1090-B for which basis was reported to the IRS and for which you have no adjustments see instructions). However, you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b Bb Totals for all transactions reported on Form) 8949 with Box D checked 9 Totals for all transactions reported on Forms) 8949 with Box E checked 10 Totals for all transactions reported on Forms) 8949 with Box Fchecked 11 Gain from Form 4797, Part I: long-term gain from Forms 2439 and 6252, and long-term gain or loss from Forms 4684,6781 and 8824 12 Net long-term gain or floss) from partnerships, corporations, estates, and truststrom Schedules K-1 12 13 Capital gain distributions. See the instructions 13 14 Long-term capital loss carryover. Enter the amount, it any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 15 Net long-term capital gain or loss). Combine lines 8a through 14 in column (h). Then go to Partillon the back For Paperwork Reduction Act Notice, see your tax return instructions. Cut N 113337 Schedule D Form 1046 104R 2018 11 15 Page 2 Schedule D Form 1040 or 1040-SR 2019 Part III Summary 16 17 18 16 Combine lines 7 and 15 and enter the result If line 16 is a gain, enter the amount from line 16 on Form 1040 or 1040-SR, line 6; or Form 1040-NR, 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 -6- on Form 1040 or 1040-SR, line 6: or Form 1040-NR, line 14. Then go to line 22. Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 19 # you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 20 Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, 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. 18 21 21 # line 16 is a loss, enter here and on Form 1040 or 1040-SR, line 6 of Form 1046-NR. line 14 the smaller of: The loss on line 16; or } ($3,000), or if married filing separately. (51.500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040 or 1040-SR, line 38 or Form 1040-NR, line 100? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR. line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Schedule D Form 1040 or 1040-SR2019 Complete a 1040 Schedule D For this assignment, you will need to download a Schedule D form Based on the following information, prepare a Schedule D form. Assume you have already comploted a Form 8949. All transactions have been reported on Form 1099. B to the IRS. For Part report your information on line 1b. For Part Il report your information on line 8b. Remember to complete Part III Line 16 Susan Smith 231-23.5678 On July 1 three years ago. Susan bought 500 shares of Gold Stream common stock for $2.500. Susan sold the stock on August 1 of the current year for $5,000 On August 1 of the previous year, Susan bought 500 shares of XYZ Corp for $3.000. She sold the stock on July 31 of the current year for 51.000 On January 4 of the current year Susan bought 100 share of General Corporation stock for $2.000. The year end value of the stock is $4500 Comprehensive Tax Problem Joseph and Diane Smith 1580 West Street Chatham, VA 24531 Joseph and Diane are both 35 and have no dependents. If your clients receive a refund, they want the full amount refunded to them. Diane is currently pregnant and will give birth during the next tax year. Joseph - SSN: 400-20-0100 Diane - SSN: 200-40-8000 Joseph works as a salesman. During the current year, Joseph earned a total compensation from his job of $125,000. Following are the deductions from his pay. Federal Withholding $20,000 FICA (Social Security) Withholding $ 7,347 Medicare $ 1,813 Virginia Withholding $ 4,000 Diane is a nurse and earned total compensation of $45,400. Following are the deductions from her pay. Federal Withholding $ 5,000 FICA (Social Security) Withholding $ 2,815 Medicare $ 658 Virginia Withholding $ 2,000 Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Joseph and Diane have investments in stocks and have a saving account at a local bank. During the current year, they earned $1,450 in interest from the Bank of Virginia. They received qualified stock dividends of $5,950 from GE stock. They also traded in the stock market during the year and had the following results (just enter net amounts in the proper schedule). Long Term Capital Gain $ 4,900 Long Term Capital Loss $(3,200) Short Term Capital Gain $ Short Term Capital Loss $(7,800) They have no loss carryover from previous years. Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising $175 Supplies Legal Fees $750 Liability Insurance $600 $500 The couple have the following additional expenses for the year: Health Insurance (after-tax) $ 4,400 Doctor bills $ 470 Real estate taxes $ 2,200 Personal property taxes 400 Mortgage Interest $15,600 Charitable contributions - cash 9,000 Charitable contributions - Stock GE stack owed 5.vears. Imalat M tonn Joseph also owns side consulting business which he runs as a sole proprietor. He uses the cash method to account for this activity. He uses a room in his home exclusively for activities related to this business. Joseph has opted to use the simplified method for a deduction for the business use of his home amounting to $1,500. During the year, Joseph earned and received $12,500 from clients related to this business. His expenses were as follows: Advertising $175 Supplies $500 Legal Fees $750 Liability Insurance $600 The couple have the following additional expenses for the year: Health Insurance (after-tax) $ 4,400 Doctor bills $ 470 Real estate taxes $ 2,200 Personal property taxes $ 400 Mortgage Interest $15,600 Charitable contributions - cash 9,000 Charitable contributions - Stock GE stock owed 5 years: Fair Market Value (FMV) $ 8,000 Adjusted basis 2,000 Tax preparation fees 750 Note: Ignore any potential qualified business income deduction for the purposes of this project Use the information provided below to complete the Schedule D form. Remember to complete the taxpayer information at the top of the form. Comprehensive Tax Problem Update your 1040 form for this new information. Complete the taxpayer information section at the top of the form Enter the appropriate information in Part I and Part II Check the appropriate boxes in Part III - the taxpayers have no foreign interests Submit your Schedule D Enter the Gain or Loss from Schedule D to Form 1040 Line 6 4 SCHEDULED OMSN 1545-0074 Form 1040 or 104-SRI Capital Gains and Losses Attach to Form 1040, 040-SR, or 1040-NR. 2019 Department of the Treasury Go to www.irs.gov/Scheduled for instructions and the latest information Revenue Service Use Form 8949 to list your transactions for lines 1b, 2, 3, 8, 9 and 10. Com 12 Name shown on retum Your social security number Did you dispose of any investments in a qualified opportunity fund during the tax year? Yes No "Yes"attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss Part 1 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 Nainor lines below. A strat com Proceed som ho con This form may be easier to complete if you round off cents to for other word. Partner whole dollars in2.com who 1a 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, love this line blank and go to line 1b 1b Totals for all transactions reported on Forms) 8949 with Box A checked 2 Totals for all transactions reported on Formis) 8949 with Box Bchecked. 3 Totals for all transactions reported on Form) 1949 with Box C checked 4 Short-term gain from Form 6252 and short-term gain or loss) from Forms 4684.6781, and 8824 5 Net short-term gain or loss from partnerships, Scorporations, states, and trusts from Schedules) 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 7 Net short-term capital gain or loss). Combine lines ta through 6 in column h, you have any long- term capital gains or losses, go to Part It below. Otherwise, go to Part Ill on the back 7 Partill Long-Term Capital Gains and Losses - Generally Assets Held More Than One Year (see instructions Soo instructions for how to figure the amounts to enter on the lines below. S Proceed This form may be easier to complete If you round off cents to from from whole dollars prio for other formats correth line 2 8a Totals for all long-term transaction reported on Form 1090-B for which basis was reported to the IRS and for which you have no adjustments see instructions). However, you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b Bb Totals for all transactions reported on Form) 8949 with Box D checked 9 Totals for all transactions reported on Forms) 8949 with Box E checked 10 Totals for all transactions reported on Forms) 8949 with Box Fchecked 11 Gain from Form 4797, Part I: long-term gain from Forms 2439 and 6252, and long-term gain or loss from Forms 4684,6781 and 8824 12 Net long-term gain or floss) from partnerships, corporations, estates, and truststrom Schedules K-1 12 13 Capital gain distributions. See the instructions 13 14 Long-term capital loss carryover. Enter the amount, it any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 15 Net long-term capital gain or loss). Combine lines 8a through 14 in column (h). Then go to Partillon the back For Paperwork Reduction Act Notice, see your tax return instructions. Cut N 113337 Schedule D Form 1046 104R 2018 11 15 Page 2 Schedule D Form 1040 or 1040-SR 2019 Part III Summary 16 17 18 16 Combine lines 7 and 15 and enter the result If line 16 is a gain, enter the amount from line 16 on Form 1040 or 1040-SR, line 6; or Form 1040-NR, 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 -6- on Form 1040 or 1040-SR, line 6: or Form 1040-NR, line 14. Then go to line 22. Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 19 # you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 20 Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, 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. 18 21 21 # line 16 is a loss, enter here and on Form 1040 or 1040-SR, line 6 of Form 1046-NR. line 14 the smaller of: The loss on line 16; or } ($3,000), or if married filing separately. (51.500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040 or 1040-SR, line 38 or Form 1040-NR, line 100? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR. line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Schedule D Form 1040 or 1040-SR2019 Complete a 1040 Schedule D For this assignment, you will need to download a Schedule D form Based on the following information, prepare a Schedule D form. Assume you have already comploted a Form 8949. All transactions have been reported on Form 1099. B to the IRS. For Part report your information on line 1b. For Part Il report your information on line 8b. Remember to complete Part III Line 16 Susan Smith 231-23.5678 On July 1 three years ago. Susan bought 500 shares of Gold Stream common stock for $2.500. Susan sold the stock on August 1 of the current year for $5,000 On August 1 of the previous year, Susan bought 500 shares of XYZ Corp for $3.000. She sold the stock on July 31 of the current year for 51.000 On January 4 of the current year Susan bought 100 share of General Corporation stock for $2.000. The year end value of the stock is $4500