For the Week 3 deliverable, you will focus ONLY on the introductory sentence and items 12, 13, 14, 16 and 17.Create: Form 1040, Schedule A, Schedule B, and Schedule C.

Here are the questions:

John R. and Anne L. Miller are married and live at 13071 Sterling Drive, Aitkin, MN 56431. John is a

self-employed insurance claims adjuster (business activity code 524290), and Anne is the dietitian for the local school district. They choose to file a joint tax return each year.

12. Every year around Christmas, John receives cards from various car repair facilities (including dealerships) expressing thanks for the business referrals and enclosing cash. John has no arrangement, contractual or otherwise, that requires any compensation for the referrals he makes. Concerned about the legality of such gifts, John consulted an attorney about the matter a few years ago. Without passing judgment on the status of the payors, the attorney found that John's acceptance of the payments does not violate state or local law. John sincerely believes that the payments he receives have no effect on thereferrals he makes. During December 2014, John received cards containing $7,200. One additional card containing $900 was delayed in the mail and was not received by John until January 4, 2015.

13. In addition to those previously noted, the Millers' receipts during 2014 are summarized below:

Payments to John for services rendered (as reported on Forms 1099MISC issued by several

payor insurance companies) pursuant to contractual arrangement $82,000

Income tax refunds for tax year 2013:

Federal 210

State of Minnesota 90

Interest income (reported on separate Forms 1099INT):

State of Minnesota general-purpose bonds 1,400

General Electric corporate bonds 1,100

Certificate of deposit at Aitkin National Bank 900

Qualified dividends (Duke Energy, reported on Form 1099DIV) 1,200

Proceeds from garage sale (see item 14 below) 9,200

Cash gifts from John's parents 24,000

John's net state lottery losses ($1,000 of winnings reported on Form W2-G; $2,300 of losses) (1,300)

14. On June 7 and 8, 2014, the Millers held a garage sale to dispose of unwanted furniture, appliances, books, bicycles, clothes, and one boat (including trailer). The estimated basis of the items sold is $25,500. All assets were used by the Millers for personal purposes.

16. The Millers have two sons who live with them: Trace and Trevor. Both are full-time students. Trace is an accomplished singer and earned $4,200 during the year performing at special events (e.g., weddings, anniversaries, civic functions). Trace deposits his earnings in a savings account intended to help cover future college expenses. Trevor does not have a job.

17. The Form W2 Anne receives from her employer reflects wages of $32,000. Appropriate amounts

for Social Security and Medicare taxes were deducted. Income tax withholdings were $1,320 for Federal and $1,056 for state. The Millers made quarterly tax payments of $2,000 for Federal and $600 for state on each of the following dates: April 15, 2014, June 16, 2014, September 15, 2014, and December 29,

2014. None of the Millers hold any foreign financial accounts. Relevant Social Security numbers are noted below:

Name Social Security Number Birth Date

John R. Miller 111-11-1111 06/06/1972

Anne L. Miller 123-45-6781 08/14/1973

Name Social Security Number Birth Date

Gary Simon 123-45-6784 03/12/1934

Trace Miller 123-45-6788 09/13/1997

Trevor Miller 123-45-6789 07/20/1999