$ $ Document Review Simulation - Mark and Barbara Matthews - FALL 2020 NOTE: All you will turn in for grading is page 1 of this document. Based on the interview notes and the documents below, answer the following items relative to their 2019 Form 1040. If the amount is negative, put a minus (-) before the number. If the amount is zero, write 0. 1. Wages, salaries, tips, etc. $ 2. Taxable interest 3. Taxable dividends $ 4. Business income or (deductible loss) $ 5. Capital gain or (deductible loss) $ 6. Taxable IRA distribution $ 7. Taxable pension distribution $ 8. Rental real estate income or (deductible loss) $ 9. Taxable social security benefits $ 10. Taxable other income $ 11. Qualified business income (QBI) deduction $ 12. Federal income tax withheld $ 13. Foreign tax credit $_ 14. What is the tax rate on their qualified dividends? 15. Is Barbara's business a specified service trade/business (SSTB)? YES?NO Mark (DOB 02/02/1950) and Barbara (DOB 04/03/1957) Matthews, are married and file jointly. Mark is retired. Barbara is a part-time accounting assistant at Conway Company but also has a bookkeeping practice. They had minimum essential health insurance coverage all year. They have provided you with documentation for their 2019 income and expenses --- see below. You also have obtained the following information from interviewing them: $ 1 INTERVIEW NOTES 1. They tell you in the interview that they have $800 of bingo winnings (no W-2G required to be issued) but also $500 of bingo losses. 2. In addition to being a part-time employee at Conway Company, Barbara is also a self-employed bookkeeper. In 2019, she has documents to prove the following income and expenses: Fees received $90,100 Advertising expenses 1,900 Business meals ($1,400) and business entertainment ($600) 2,000 Office expenses 3,550 Business gifts to 20 clients ($200 Lalique vase to each) 4,000 Business computer purchased and put into service 12/1/19 3,160 Simplified method home office: 380 square foot office (1,900 square foot home) They would like to take the maximum deduction for their expenses in 2019. 3. The Matthews purchased a rent house on 1/2/19 for $180,000 ($120,000 allocated to the structure and $60,000 allocated to the land). They immediately rented it and have the following income and expenses for 2019: Rental income received ($800 x 12) $9,600 Mortgage interest 6,800 Real estate taxes 3,510 Maintenance expense Homeowner's insurance 2,340 Repair expense 1,970 The Matthews actively participated in the management of the rent house but they do not qualify as real estate professionals. The rental activity is not a qualified trade/business. 850 2 4. Mark retired and began receiving retirement income on March 1, 2017. No distributions were received prior to his retirement. Mark selected a single life annuity for these payments. The plan cost at the annuity start date was $14,500. Mark has already recovered $1,519 of his cost in the plan. They use the simplified method to determine the taxable amount. 5. The Matthews made timely quarterly tax payments for 2019 to IRS of $5,000 each quarter ($20,000 total). DOCUMENTS See the next five pages. 3 ERPUSSY 310-00-XXXX Emerican 40-000XXXX Empire, address, and Peode Gate, Viettha bolle e file OM N. 1545-B PASTI mw.. 2 MM with 28,500.00 2,784.00 3 Scrimages 4 Bowie 28,500.00 1,767.00 5 Medicare weges and tipe Mediere tex whold 28,500.00 413.25 7 Socialecarly ice 8 Allocated 1 CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP Deprecare beri Lry's first med Last 1. 11 Noguers 18 Series for a 12 513 The 125 w BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 126 1944 Eye's and Peode 15 su proyer Dan YS 34-500XXXX 18 dageLa 18 Swaps, IT se non 28,500.00 1.400.00 Deontol the Tury- Talavere terce 2019 form Statement Copy-To the Fed With Employee's FEDERAL Tax Return This information is being rushed to the Intema Revenue Service 2019 CORRECTED Of checked PAYER S name, street address, city or town, or province 1 Gross distribution OMB No. 1846-0110 Distributions From country. IP or forsign postal code, and phone no. Pensions, Annuities, Retirement or 22,532.00 PINE CORPORATION Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. For 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYERS TIN RECIPIENT'S TI 3 Capital in Oncluded 4 Fader income tax income on your Inbox 28 withhold federal tax return. If this form shows 40-100XXXX 317-00-XXXX 2,253.00 federal income RECIPIENTS reme 5 Employee contribution Neturrealized tax withheld in Designated Roth appreciation in con buttons or ployer's securities box 4, attach MARK MATTHEWS insurance premis this copy to your return. Stroot addresencluding apt.no) 7 Distribution w & Other SEP codels 742 RED ROOSTER SIMPLE This information is 7 beinglumised to City or low state or province, country, and ZIP or foreign postal code a Your percentage of the total amployer cettes the IRS YOUR CITY, STATE ZIP distribution $ 14,500.00 10 Amour wouble to IPA 11 1st year ol FATCA fing 12 state tax withheld 13 St Payer's siste no14 Stat distribution within 5 years desig, Rothco Asiant number se trudio 15 Local tax wild 17 Local distribution 16 Name of locality Date of payment Form 1099-R www.regowo Deparment of the Treasurya Pro Service ERPUSSY 310-00-XXXX Emerican 40-000XXXX Empire, address, and Peode Gate, Viettha bolle e file OM N. 1545-B PASTI mw.. 2 MM with 28,500.00 2,784.00 3 Scrimages 4 Bowie 28,500.00 1,767.00 5 Medicare weges and tipe Mediere tex whold 28,500.00 413.25 7 Socialecarly ice 8 Allocated 1 CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP Deprecare beri Lry's first med Last 1. 11 Noguers 18 Series for a 12 513 The 125 w BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 126 1944 Eye's and Peode 15 su proyer Dan YS 34-500XXXX 18 dageLa 18 Swaps, IT se non 28,500.00 1.400.00 Deontol the Tury- Talavere terce 2019 form Statement Copy-To the Fed With Employee's FEDERAL Tax Return This information is being rushed to the Intema Revenue Service 2019 CORRECTED Of checked PAYER S name, street address, city or town, or province 1 Gross distribution OMB No. 1846-0110 Distributions From country. IP or forsign postal code, and phone no. Pensions, Annuities, Retirement or 22,532.00 PINE CORPORATION Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. For 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYERS TIN RECIPIENT'S TI 3 Capital in Oncluded 4 Fader income tax income on your Inbox 28 withhold federal tax return. If this form shows 40-100XXXX 317-00-XXXX 2,253.00 federal income RECIPIENTS reme 5 Employee contribution Neturrealized tax withheld in Designated Roth appreciation in con buttons or ployer's securities box 4, attach MARK MATTHEWS insurance premis this copy to your return. Stroot addresencluding apt.no) 7 Distribution w & Other SEP codels 742 RED ROOSTER SIMPLE This information is 7 beinglumised to City or low state or province, country, and ZIP or foreign postal code a Your percentage of the total amployer cettes the IRS YOUR CITY, STATE ZIP distribution $ 14,500.00 10 Amour wouble to IPA 11 1st year ol FATCA fing 12 state tax withheld 13 St Payer's siste no14 Stat distribution within 5 years desig, Rothco Asiant number se trudio 15 Local tax wild 17 Local distribution 16 Name of locality Date of payment Form 1099-R www.regowo Deparment of the Treasurya Pro Service CORRECTED (If checked PAYERS na, sireet adress, chty or town, state or province, 1 Gross distribution OM NO. 1545-0159 Distributions From by ZIP or foreign postal code and phone no. Pensions, Anpuities, Retirement or 3,200.00 ESSEX BANK, CUSTODIAN 2019 Profit-Sharing Plans FOR ROTH IRA OF MARK MATTHEWS 2 Taxal amount IRAs, Insurance 300 MARIN STREET Contracts, etc. YOUR CITY, STATE ZIP 0.00 Fom 1099-R 2b Tetable amount Total Copy B not determined distribution Report this PAYERS TIN RECIPIENTS TIN 3 Capital gain (included 4 Federal com income on your in box 2) federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employer Net ulvezed Degral Poin appreciation in tex withheld in contributions employer's securities box 4, attach MARK MATTHEWS insurance promiums this copy to your retum. Street address including apl. no.) T Distribution IFA & Other SEPS SIMPLE 742 RED ROOSTER This information is Q X being furnished to Cry or town, in or province, country, and ZP or foreign postal code a your page a total bloerpe con todos the is YOUR CITY STATE ZIP distribution *$ 10 Amount tocable to 11 isiyod FATCA ing 12 Statet wereld 13 State/Payer's tate no 14 Siste distribution wenyewe Barip Aatheasts. | $ Account number se instruction Date of 15 Local tax withheld 16 None of locality 17 Local distribution payment For 1099-R www.goo009 Department of the Tremur ve Service 2019 FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT PART OF YOUR ROCIAL BECURITY BENEFITS OWNIK BOKS MAY BE TAXABLE INCOME SEE THE AVERE FOR MORE INFORMATION Box 1. Nate Box 2. Bendery Social Security MARK MATTHEWS 317-00-XXXX Faxa. Badin 2018 a 4. Hepaid to 884 i 2019 a Ne Deres 20 Bora $17 214.00 $17.214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Total Additions: Benefits for 2019: $17.214 Box Volary Foderat come Tax Wir $1,721.00 Box 7 Adidas 742 Red Rooster Your City, State ZIP B Clin Nurhavn Draft as of June 21, 2019 . Subject to change Faw A-130-EM 20 DO NOT RETURN THIS FORM TO SAOR IRS CORRECTED (If checked PAYERS na, sireet adress, chty or town, state or province, 1 Gross distribution OM NO. 1545-0159 Distributions From by ZIP or foreign postal code and phone no. Pensions, Anpuities, Retirement or 3,200.00 ESSEX BANK, CUSTODIAN 2019 Profit-Sharing Plans FOR ROTH IRA OF MARK MATTHEWS 2 Taxal amount IRAs, Insurance 300 MARIN STREET Contracts, etc. YOUR CITY, STATE ZIP 0.00 Fom 1099-R 2b Tetable amount Total Copy B not determined distribution Report this PAYERS TIN RECIPIENTS TIN 3 Capital gain (included 4 Federal com income on your in box 2) federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employer Net ulvezed Degral Poin appreciation in tex withheld in contributions employer's securities box 4, attach MARK MATTHEWS insurance promiums this copy to your retum. Street address including apl. no.) T Distribution IFA & Other SEPS SIMPLE 742 RED ROOSTER This information is Q X being furnished to Cry or town, in or province, country, and ZP or foreign postal code a your page a total bloerpe con todos the is YOUR CITY STATE ZIP distribution *$ 10 Amount tocable to 11 isiyod FATCA ing 12 Statet wereld 13 State/Payer's tate no 14 Siste distribution wenyewe Barip Aatheasts. | $ Account number se instruction Date of 15 Local tax withheld 16 None of locality 17 Local distribution payment For 1099-R www.goo009 Department of the Tremur ve Service 2019 FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT PART OF YOUR ROCIAL BECURITY BENEFITS OWNIK BOKS MAY BE TAXABLE INCOME SEE THE AVERE FOR MORE INFORMATION Box 1. Nate Box 2. Bendery Social Security MARK MATTHEWS 317-00-XXXX Faxa. Badin 2018 a 4. Hepaid to 884 i 2019 a Ne Deres 20 Bora $17 214.00 $17.214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Total Additions: Benefits for 2019: $17.214 Box Volary Foderat come Tax Wir $1,721.00 Box 7 Adidas 742 Red Rooster Your City, State ZIP B Clin Nurhavn Draft as of June 21, 2019 . Subject to change Faw A-130-EM 20 DO NOT RETURN THIS FORM TO SAOR IRS ABC INVESTMENTS 456 Pin Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX .220.00 .189.00 .300.00 .0.00 -0.00 0.00 .50.00 0.00 -0.00 -0.00 18.00 0.00 -0.00 0.00 .0.00 0.00 -0.00 Form 1099-DIV 2019 Dividends and Distributions Copy Blor Recipient (OUS NO. 1545-0110) 1a Total Ordinary Dividends 1b Qualified Dividends.. 2a Total Capital Gain Distributions (Includes 2b-2d). 2b Capital Gains that represent Unrecaptured 1250 Gain 2c Capital Gains that represent Section 1202 Gain. 2d Capital Gains that represent Collectibles (28%) Gain. 3 Nondividend Distributions .. 4 Federal Income Tax Withheld 5 Section 199A Dividends 6 Investment Expenses 7 Foreign Tex Paid. 8 Foreign country or U.S. Possession 9 Cash Liquidation Distributions 10 Non-Cash Liquidation Distributions 11 Exempt Interest Dividends. .12 Specified Private Activity Bond Interest Dividends 13 State .. 14 State Identification No. 15 State Tex Withheld Form 1099-MISC 2019 Miscellaneous Income Copy B for Resplent (OMB NO. 1545-0115) 2 Royalties.. 4 Federal Income Tax Withheld 8 Substitute Payments in Lleu of Dividends or Interest 18 State Tax Withheld 17 State Payer's State No. 18 State Income... Form 1099-INT* 2019 Interest Income Copy Bfor Recipient OMB NO. 1545-01121 1 Interest Income.. 2 Early Withdrawal Penalty 3 Interest on U.S. Savings Bonds and Treas. Obligations. 4 Federal Income Tax Withheld 5 Investment Expenses 8 Foreign Tax Paid 7 Foreign country or U.S. Possession 8 Tax-Exempt interest 9 Specified Private Activity Bond Interest 14 Tax-Exempt Bond CUSIP No.. Summary of 2019 Proceeds From Broker and Barter Exchange Transactions Sales Price of Stocks, Bonds, etc.. Federal Income Tax Withheld 0.00 ..0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.00 .0.00 0.00 .0.00 6,300.00 -0.00 Greas Process from each of your security Transactions are reported individusly to the IRS. Refer to the Farm 1000-8 section of this statement Reportgrono posedendividually for each securly on the appropriate IRS Sex mourn Domo report gross proceeds in aggregate Page 1 of 2 ABC INVESTMENTS 456 Pima Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Capy B for Recipient OM NO 1545-0715 Short-term transactions for which basis is reported to the IRS Report on Form B949 with Box A checked and/or Schedule D Parti (This is a Bubut for lo & 6) 8 Description, 1d Stock or Other Symbol, CUSIP (RS For 1096-B box numbers are shown below in boll type) Adlon Dube 16 Date so ta Quartity 1d Proceeds te Costor Gain/Con 4 lg Woh Federal Income 14 15 Aequired ded Sold Other Bags Los Ollowed Tax Withheld State With Idaho Co. Common Stock Sale 10/01/2018 10/01/2019 250.000 TOTALS (489.00) 1,700.00 1,700.00 2,189.00 2,189.00 FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Copy for pent ONB NO. 1546-0715 Long-term transactions for which basis is not reported to the IRS Report on Form 8949 with Box Echecked and/or Schedule D, Part It (This Laba Babattute for aceste & 6) 8 Description, 1d Stockor Other Symbol, CUSIP ORS Form 1099-8 box numbers are shown below in bold type) Action 16 Date 10 Date sold ta Quality 1d Proceeds Gainoms 1 Wash Sale Federal Income 14 15 Status Aquired dispod Sold Other Basis Loss Dialowed Tax withheld Sale Witchell lowa Co. Common Stock Sale 06/15/1999 03/01/2019 200.000 TOTALS 2,900.00 4,800.00 4,600.00 1,700.00 1,700.00 This is important to information and is being fumished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other action may be imposed on you if this income is taxable and the IRS determines that it has not been reported. Page 2 of 2 ABC INVESTMENTS 456 Pima Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Capy B for Recipient OM NO 1545-0715 Short-term transactions for which basis is reported to the IRS Report on Form B949 with Box A checked and/or Schedule D Parti (This is a Bubut for lo & 6) 8 Description, 1d Stock or Other Symbol, CUSIP (RS For 1096-B box numbers are shown below in boll type) Adlon Dube 16 Date so ta Quartity 1d Proceeds te Costor Gain/Con 4 lg Woh Federal Income 14 15 Aequired ded Sold Other Bags Los Ollowed Tax Withheld State With Idaho Co. Common Stock Sale 10/01/2018 10/01/2019 250.000 TOTALS (489.00) 1,700.00 1,700.00 2,189.00 2,189.00 FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Copy for pent ONB NO. 1546-0715 Long-term transactions for which basis is not reported to the IRS Report on Form 8949 with Box Echecked and/or Schedule D, Part It (This Laba Babattute for aceste & 6) 8 Description, 1d Stockor Other Symbol, CUSIP ORS Form 1099-8 box numbers are shown below in bold type) Action 16 Date 10 Date sold ta Quality 1d Proceeds Gainoms 1 Wash Sale Federal Income 14 15 Status Aquired dispod Sold Other Basis Loss Dialowed Tax withheld Sale Witchell lowa Co. Common Stock Sale 06/15/1999 03/01/2019 200.000 TOTALS 2,900.00 4,800.00 4,600.00 1,700.00 1,700.00 This is important to information and is being fumished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other action may be imposed on you if this income is taxable and the IRS determines that it has not been reported. Page 2 of 2 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234 $ $ Document Review Simulation - Mark and Barbara Matthews - FALL 2020 NOTE: All you will turn in for grading is page 1 of this document. Based on the interview notes and the documents below, answer the following items relative to their 2019 Form 1040. If the amount is negative, put a minus (-) before the number. If the amount is zero, write 0. 1. Wages, salaries, tips, etc. $ 2. Taxable interest 3. Taxable dividends $ 4. Business income or (deductible loss) $ 5. Capital gain or (deductible loss) $ 6. Taxable IRA distribution $ 7. Taxable pension distribution $ 8. Rental real estate income or (deductible loss) $ 9. Taxable social security benefits $ 10. Taxable other income $ 11. Qualified business income (QBI) deduction $ 12. Federal income tax withheld $ 13. Foreign tax credit $_ 14. What is the tax rate on their qualified dividends? 15. Is Barbara's business a specified service trade/business (SSTB)? YES?NO Mark (DOB 02/02/1950) and Barbara (DOB 04/03/1957) Matthews, are married and file jointly. Mark is retired. Barbara is a part-time accounting assistant at Conway Company but also has a bookkeeping practice. They had minimum essential health insurance coverage all year. They have provided you with documentation for their 2019 income and expenses --- see below. You also have obtained the following information from interviewing them: $ 1 INTERVIEW NOTES 1. They tell you in the interview that they have $800 of bingo winnings (no W-2G required to be issued) but also $500 of bingo losses. 2. In addition to being a part-time employee at Conway Company, Barbara is also a self-employed bookkeeper. In 2019, she has documents to prove the following income and expenses: Fees received $90,100 Advertising expenses 1,900 Business meals ($1,400) and business entertainment ($600) 2,000 Office expenses 3,550 Business gifts to 20 clients ($200 Lalique vase to each) 4,000 Business computer purchased and put into service 12/1/19 3,160 Simplified method home office: 380 square foot office (1,900 square foot home) They would like to take the maximum deduction for their expenses in 2019. 3. The Matthews purchased a rent house on 1/2/19 for $180,000 ($120,000 allocated to the structure and $60,000 allocated to the land). They immediately rented it and have the following income and expenses for 2019: Rental income received ($800 x 12) $9,600 Mortgage interest 6,800 Real estate taxes 3,510 Maintenance expense Homeowner's insurance 2,340 Repair expense 1,970 The Matthews actively participated in the management of the rent house but they do not qualify as real estate professionals. The rental activity is not a qualified trade/business. 850 2 4. Mark retired and began receiving retirement income on March 1, 2017. No distributions were received prior to his retirement. Mark selected a single life annuity for these payments. The plan cost at the annuity start date was $14,500. Mark has already recovered $1,519 of his cost in the plan. They use the simplified method to determine the taxable amount. 5. The Matthews made timely quarterly tax payments for 2019 to IRS of $5,000 each quarter ($20,000 total). DOCUMENTS See the next five pages. 3 ERPUSSY 310-00-XXXX Emerican 40-000XXXX Empire, address, and Peode Gate, Viettha bolle e file OM N. 1545-B PASTI mw.. 2 MM with 28,500.00 2,784.00 3 Scrimages 4 Bowie 28,500.00 1,767.00 5 Medicare weges and tipe Mediere tex whold 28,500.00 413.25 7 Socialecarly ice 8 Allocated 1 CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP Deprecare beri Lry's first med Last 1. 11 Noguers 18 Series for a 12 513 The 125 w BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 126 1944 Eye's and Peode 15 su proyer Dan YS 34-500XXXX 18 dageLa 18 Swaps, IT se non 28,500.00 1.400.00 Deontol the Tury- Talavere terce 2019 form Statement Copy-To the Fed With Employee's FEDERAL Tax Return This information is being rushed to the Intema Revenue Service 2019 CORRECTED Of checked PAYER S name, street address, city or town, or province 1 Gross distribution OMB No. 1846-0110 Distributions From country. IP or forsign postal code, and phone no. Pensions, Annuities, Retirement or 22,532.00 PINE CORPORATION Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. For 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYERS TIN RECIPIENT'S TI 3 Capital in Oncluded 4 Fader income tax income on your Inbox 28 withhold federal tax return. If this form shows 40-100XXXX 317-00-XXXX 2,253.00 federal income RECIPIENTS reme 5 Employee contribution Neturrealized tax withheld in Designated Roth appreciation in con buttons or ployer's securities box 4, attach MARK MATTHEWS insurance premis this copy to your return. Stroot addresencluding apt.no) 7 Distribution w & Other SEP codels 742 RED ROOSTER SIMPLE This information is 7 beinglumised to City or low state or province, country, and ZIP or foreign postal code a Your percentage of the total amployer cettes the IRS YOUR CITY, STATE ZIP distribution $ 14,500.00 10 Amour wouble to IPA 11 1st year ol FATCA fing 12 state tax withheld 13 St Payer's siste no14 Stat distribution within 5 years desig, Rothco Asiant number se trudio 15 Local tax wild 17 Local distribution 16 Name of locality Date of payment Form 1099-R www.regowo Deparment of the Treasurya Pro Service ERPUSSY 310-00-XXXX Emerican 40-000XXXX Empire, address, and Peode Gate, Viettha bolle e file OM N. 1545-B PASTI mw.. 2 MM with 28,500.00 2,784.00 3 Scrimages 4 Bowie 28,500.00 1,767.00 5 Medicare weges and tipe Mediere tex whold 28,500.00 413.25 7 Socialecarly ice 8 Allocated 1 CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP Deprecare beri Lry's first med Last 1. 11 Noguers 18 Series for a 12 513 The 125 w BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 126 1944 Eye's and Peode 15 su proyer Dan YS 34-500XXXX 18 dageLa 18 Swaps, IT se non 28,500.00 1.400.00 Deontol the Tury- Talavere terce 2019 form Statement Copy-To the Fed With Employee's FEDERAL Tax Return This information is being rushed to the Intema Revenue Service 2019 CORRECTED Of checked PAYER S name, street address, city or town, or province 1 Gross distribution OMB No. 1846-0110 Distributions From country. IP or forsign postal code, and phone no. Pensions, Annuities, Retirement or 22,532.00 PINE CORPORATION Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. For 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYERS TIN RECIPIENT'S TI 3 Capital in Oncluded 4 Fader income tax income on your Inbox 28 withhold federal tax return. If this form shows 40-100XXXX 317-00-XXXX 2,253.00 federal income RECIPIENTS reme 5 Employee contribution Neturrealized tax withheld in Designated Roth appreciation in con buttons or ployer's securities box 4, attach MARK MATTHEWS insurance premis this copy to your return. Stroot addresencluding apt.no) 7 Distribution w & Other SEP codels 742 RED ROOSTER SIMPLE This information is 7 beinglumised to City or low state or province, country, and ZIP or foreign postal code a Your percentage of the total amployer cettes the IRS YOUR CITY, STATE ZIP distribution $ 14,500.00 10 Amour wouble to IPA 11 1st year ol FATCA fing 12 state tax withheld 13 St Payer's siste no14 Stat distribution within 5 years desig, Rothco Asiant number se trudio 15 Local tax wild 17 Local distribution 16 Name of locality Date of payment Form 1099-R www.regowo Deparment of the Treasurya Pro Service CORRECTED (If checked PAYERS na, sireet adress, chty or town, state or province, 1 Gross distribution OM NO. 1545-0159 Distributions From by ZIP or foreign postal code and phone no. Pensions, Anpuities, Retirement or 3,200.00 ESSEX BANK, CUSTODIAN 2019 Profit-Sharing Plans FOR ROTH IRA OF MARK MATTHEWS 2 Taxal amount IRAs, Insurance 300 MARIN STREET Contracts, etc. YOUR CITY, STATE ZIP 0.00 Fom 1099-R 2b Tetable amount Total Copy B not determined distribution Report this PAYERS TIN RECIPIENTS TIN 3 Capital gain (included 4 Federal com income on your in box 2) federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employer Net ulvezed Degral Poin appreciation in tex withheld in contributions employer's securities box 4, attach MARK MATTHEWS insurance promiums this copy to your retum. Street address including apl. no.) T Distribution IFA & Other SEPS SIMPLE 742 RED ROOSTER This information is Q X being furnished to Cry or town, in or province, country, and ZP or foreign postal code a your page a total bloerpe con todos the is YOUR CITY STATE ZIP distribution *$ 10 Amount tocable to 11 isiyod FATCA ing 12 Statet wereld 13 State/Payer's tate no 14 Siste distribution wenyewe Barip Aatheasts. | $ Account number se instruction Date of 15 Local tax withheld 16 None of locality 17 Local distribution payment For 1099-R www.goo009 Department of the Tremur ve Service 2019 FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT PART OF YOUR ROCIAL BECURITY BENEFITS OWNIK BOKS MAY BE TAXABLE INCOME SEE THE AVERE FOR MORE INFORMATION Box 1. Nate Box 2. Bendery Social Security MARK MATTHEWS 317-00-XXXX Faxa. Badin 2018 a 4. Hepaid to 884 i 2019 a Ne Deres 20 Bora $17 214.00 $17.214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Total Additions: Benefits for 2019: $17.214 Box Volary Foderat come Tax Wir $1,721.00 Box 7 Adidas 742 Red Rooster Your City, State ZIP B Clin Nurhavn Draft as of June 21, 2019 . Subject to change Faw A-130-EM 20 DO NOT RETURN THIS FORM TO SAOR IRS CORRECTED (If checked PAYERS na, sireet adress, chty or town, state or province, 1 Gross distribution OM NO. 1545-0159 Distributions From by ZIP or foreign postal code and phone no. Pensions, Anpuities, Retirement or 3,200.00 ESSEX BANK, CUSTODIAN 2019 Profit-Sharing Plans FOR ROTH IRA OF MARK MATTHEWS 2 Taxal amount IRAs, Insurance 300 MARIN STREET Contracts, etc. YOUR CITY, STATE ZIP 0.00 Fom 1099-R 2b Tetable amount Total Copy B not determined distribution Report this PAYERS TIN RECIPIENTS TIN 3 Capital gain (included 4 Federal com income on your in box 2) federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employer Net ulvezed Degral Poin appreciation in tex withheld in contributions employer's securities box 4, attach MARK MATTHEWS insurance promiums this copy to your retum. Street address including apl. no.) T Distribution IFA & Other SEPS SIMPLE 742 RED ROOSTER This information is Q X being furnished to Cry or town, in or province, country, and ZP or foreign postal code a your page a total bloerpe con todos the is YOUR CITY STATE ZIP distribution *$ 10 Amount tocable to 11 isiyod FATCA ing 12 Statet wereld 13 State/Payer's tate no 14 Siste distribution wenyewe Barip Aatheasts. | $ Account number se instruction Date of 15 Local tax withheld 16 None of locality 17 Local distribution payment For 1099-R www.goo009 Department of the Tremur ve Service 2019 FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT PART OF YOUR ROCIAL BECURITY BENEFITS OWNIK BOKS MAY BE TAXABLE INCOME SEE THE AVERE FOR MORE INFORMATION Box 1. Nate Box 2. Bendery Social Security MARK MATTHEWS 317-00-XXXX Faxa. Badin 2018 a 4. Hepaid to 884 i 2019 a Ne Deres 20 Bora $17 214.00 $17.214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Total Additions: Benefits for 2019: $17.214 Box Volary Foderat come Tax Wir $1,721.00 Box 7 Adidas 742 Red Rooster Your City, State ZIP B Clin Nurhavn Draft as of June 21, 2019 . Subject to change Faw A-130-EM 20 DO NOT RETURN THIS FORM TO SAOR IRS ABC INVESTMENTS 456 Pin Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX .220.00 .189.00 .300.00 .0.00 -0.00 0.00 .50.00 0.00 -0.00 -0.00 18.00 0.00 -0.00 0.00 .0.00 0.00 -0.00 Form 1099-DIV 2019 Dividends and Distributions Copy Blor Recipient (OUS NO. 1545-0110) 1a Total Ordinary Dividends 1b Qualified Dividends.. 2a Total Capital Gain Distributions (Includes 2b-2d). 2b Capital Gains that represent Unrecaptured 1250 Gain 2c Capital Gains that represent Section 1202 Gain. 2d Capital Gains that represent Collectibles (28%) Gain. 3 Nondividend Distributions .. 4 Federal Income Tax Withheld 5 Section 199A Dividends 6 Investment Expenses 7 Foreign Tex Paid. 8 Foreign country or U.S. Possession 9 Cash Liquidation Distributions 10 Non-Cash Liquidation Distributions 11 Exempt Interest Dividends. .12 Specified Private Activity Bond Interest Dividends 13 State .. 14 State Identification No. 15 State Tex Withheld Form 1099-MISC 2019 Miscellaneous Income Copy B for Resplent (OMB NO. 1545-0115) 2 Royalties.. 4 Federal Income Tax Withheld 8 Substitute Payments in Lleu of Dividends or Interest 18 State Tax Withheld 17 State Payer's State No. 18 State Income... Form 1099-INT* 2019 Interest Income Copy Bfor Recipient OMB NO. 1545-01121 1 Interest Income.. 2 Early Withdrawal Penalty 3 Interest on U.S. Savings Bonds and Treas. Obligations. 4 Federal Income Tax Withheld 5 Investment Expenses 8 Foreign Tax Paid 7 Foreign country or U.S. Possession 8 Tax-Exempt interest 9 Specified Private Activity Bond Interest 14 Tax-Exempt Bond CUSIP No.. Summary of 2019 Proceeds From Broker and Barter Exchange Transactions Sales Price of Stocks, Bonds, etc.. Federal Income Tax Withheld 0.00 ..0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.00 .0.00 0.00 .0.00 6,300.00 -0.00 Greas Process from each of your security Transactions are reported individusly to the IRS. Refer to the Farm 1000-8 section of this statement Reportgrono posedendividually for each securly on the appropriate IRS Sex mourn Domo report gross proceeds in aggregate Page 1 of 2 ABC INVESTMENTS 456 Pima Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Capy B for Recipient OM NO 1545-0715 Short-term transactions for which basis is reported to the IRS Report on Form B949 with Box A checked and/or Schedule D Parti (This is a Bubut for lo & 6) 8 Description, 1d Stock or Other Symbol, CUSIP (RS For 1096-B box numbers are shown below in boll type) Adlon Dube 16 Date so ta Quartity 1d Proceeds te Costor Gain/Con 4 lg Woh Federal Income 14 15 Aequired ded Sold Other Bags Los Ollowed Tax Withheld State With Idaho Co. Common Stock Sale 10/01/2018 10/01/2019 250.000 TOTALS (489.00) 1,700.00 1,700.00 2,189.00 2,189.00 FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Copy for pent ONB NO. 1546-0715 Long-term transactions for which basis is not reported to the IRS Report on Form 8949 with Box Echecked and/or Schedule D, Part It (This Laba Babattute for aceste & 6) 8 Description, 1d Stockor Other Symbol, CUSIP ORS Form 1099-8 box numbers are shown below in bold type) Action 16 Date 10 Date sold ta Quality 1d Proceeds Gainoms 1 Wash Sale Federal Income 14 15 Status Aquired dispod Sold Other Basis Loss Dialowed Tax withheld Sale Witchell lowa Co. Common Stock Sale 06/15/1999 03/01/2019 200.000 TOTALS 2,900.00 4,800.00 4,600.00 1,700.00 1,700.00 This is important to information and is being fumished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other action may be imposed on you if this income is taxable and the IRS determines that it has not been reported. Page 2 of 2 ABC INVESTMENTS 456 Pima Plaza Your City, YS ZIP 2019 TAX REPORTING STATEMENT Mark and Barbara Matthews 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 317-00-XXXX Payer's Fed ID Number: 40-200XXXX FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Capy B for Recipient OM NO 1545-0715 Short-term transactions for which basis is reported to the IRS Report on Form B949 with Box A checked and/or Schedule D Parti (This is a Bubut for lo & 6) 8 Description, 1d Stock or Other Symbol, CUSIP (RS For 1096-B box numbers are shown below in boll type) Adlon Dube 16 Date so ta Quartity 1d Proceeds te Costor Gain/Con 4 lg Woh Federal Income 14 15 Aequired ded Sold Other Bags Los Ollowed Tax Withheld State With Idaho Co. Common Stock Sale 10/01/2018 10/01/2019 250.000 TOTALS (489.00) 1,700.00 1,700.00 2,189.00 2,189.00 FORM 1099-B* 2019 Proceeds from Broker and Barter Exchange Transactions Copy for pent ONB NO. 1546-0715 Long-term transactions for which basis is not reported to the IRS Report on Form 8949 with Box Echecked and/or Schedule D, Part It (This Laba Babattute for aceste & 6) 8 Description, 1d Stockor Other Symbol, CUSIP ORS Form 1099-8 box numbers are shown below in bold type) Action 16 Date 10 Date sold ta Quality 1d Proceeds Gainoms 1 Wash Sale Federal Income 14 15 Status Aquired dispod Sold Other Basis Loss Dialowed Tax withheld Sale Witchell lowa Co. Common Stock Sale 06/15/1999 03/01/2019 200.000 TOTALS 2,900.00 4,800.00 4,600.00 1,700.00 1,700.00 This is important to information and is being fumished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other action may be imposed on you if this income is taxable and the IRS determines that it has not been reported. Page 2 of 2 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234 CORRECTED (if checked) PAYS Bans, tres adress, thy or tomt, ita Province, Corty, ZF Papers FTN beson OMB No 1545-0112 or foreign portal de und lehong mo Adelphi Bank and Trust Interest 2019 8020 Yonkers Blvd 1 Income Income YOUR CITY, STATE ZIP $ 300.00 For 1099-INT 2 Garty with real parily Copy B PAYERS THI RECIPIENTS IN For Recipient 3 Interest as U.S. Savings Bonds and Treas, olio 34-7XXXXXX 317-00-XXXX FECPIENTS Federalname as withdirweist per This is important $ 20.00 $ Information and is MARK MATTHEWS being fumised to the Foreign las peid 7 Frigory US ON Srect address including ap) $ recuired to filed Tex-centerest 742 RED ROOSTER pred hotelyben return, a negligence penelty or other action may be Oty or swarty, and Portion postcode S imposed on your 10 Marker clocount YOUR CITY, STATE ZIP 11 Bond Drown this income Isable and the IRS determines that it has FATCA tags not be reported requirement 12 Bord perman Theatre 13 Bopen streben Accountabere 1-and 16 16 Staededor a tax bond CUS. Por 1099-INT keep for your records) www.gowFONT Department of the Treasury Internal Reverse Service 1234 Mark and Barbara Matthews 742 Red Rooster Road Your City State 00000 PAY TO THE ORDER OF $ VOID DOLLARS Adelph Bank and Trust Anytow, State 00000 Fer : 111000025 : 123456789 1234
