Eric and Mary are now retired. They were able to retired early after selling Marys business. This practice set will not build on previous information, but will use the basic information, SS#, address, etc of the Eric and Mary.

Eric Amoth (Social Security Number 551-11-1111) is now 60 years old and married to Mary Amoth, age 44, (Social Security Number 552-45-6789). All the children are out of college and on their own. Eeric and Mary still live at 1313 Mockingbird Lane in Mockingbird Heights CA 92659. They file a joint return. Neither is interested in helping to fund the Presidential Election Campaign Fund. Both Eric and Mary have not worked this year. They had saved their money and planned to vacation at the beach for 5 months while maintaining the Mockingbird Lane as their principal residence. They have made no estimated tax payments for 2019 as they said they wont earn any income. They would like their occupation listed as Investor. Eric and Mary come to you for help with the preparation of their 2019 tax return and have provided the details for the following transactions:

To fund the Amoths extended vacation this year they have chosen to sell several gifts that they have received through the years. The first of these was 100 shares of Dupont stock they had received as a gift in January 2005. Uncle Billy had a basis in the stock of $70,000. At the time of the gift the FMV of the stock was $100,000. Eric sells the stock for $100,000 on 11/1/19.

The Amoths also sell the 100 shares of Home Depot stock. In 2014, the gift had a FMV of $100,000 and Uncle Billys basis was $120,000. Eric sold all 100 shares for $130,000 on 1/15/2019.

Eric also sold for $90,000 on 6/1/2019 the 100 shares of Apple stock that Uncle Billy gave him in 2017. The FMV at the time of the gift was $100,000 and ironicaly Uncle Billys basis was $120,000.

Lastly, Eric decided to sell for $115,000 the 50 shares of Dollar Tree that Uncle Bill gave him for Christmas of 2016. Ironically, Uncle Billys basis in these shares was the same $120,000 and FMV at the time of the gift was, ironically, $100,000.

The practice set includes two pieces.

Narrative:

Please prepare a narrative of the facts in the practice set that you use and that you include in the tax return. Please quote the code section and the reason for including the item in the return or not. Only those facts that are relevant to the tax return need to be addressed. If a fact is not used, you can ignore it for the narrative.

Form 1040 and related schedules and forms:

Please prepare the 1040 using the facts presented.

As a check, you will need to use:

Form 1040

Schedule D

Form 8949 note that the stock sales are not reported to the Amoths on a Form 1099. They must be detailed on Form 8949. You may need to force the Form 8949 to provide the details of the sale of the gift stock sold.