From 2016 Income Tax Fundamentals- Cummulative Software Problem

Dr. Ivan I. Incisor nad his wife Irene are marred and file a joint return for 2015. Ivan's Social Security number is 477-34-4321 and he is 48 years old. Irene I Incisor's Social Security is 637-34-4927 and she is 45 years old. They live at 468 Mule Deer Lane, Spokane, WA 99206. Dr. Incisor is dentist and he took 6 months off work to attend a cosmetic dentistry training program in 2015. His 2015 W-2 from his job at Bitewing Dental Clinic, Inc., showed the following:

Wages $65000 Withholding ( federal inceom tax) 6,000

The Incisors have a 17 year-old son, Ira, who is enrolled in the eleventh grade at the perpetual Perpetuity School. Ira's Social Security #609-99-9999. The Incisors also have an 18 year-old daughter, Iris, who is a part time freshman student at Snow Mass Community College. Iris' Social Security number 899-99-9999. Iris is married to Sean Slacker (Social Security number 896-33-0954), who is 19 years old and a part-time student at SMCC. Sean and Iris have a 1 year-old child, Seth Slacker (Social Security number 648-99-4306 ). Sean, Iris, and Seth all live in an apartment up the street from Ivan and Irene during the entire current calendar year. Sean and Iris both work for Sean's wealthy grandfather as appentices in his business. Their wages for the year were a combined $50,000, which allowed them to pay all persaonal expenses for themselves and their son.

Ivan and irene have savings account interest income of $380 form the pacific North-west bank.

The following additional information is available for the Dr. Ivan and Irene Incisor family. Ivan and Irene have the following investment income,

Dividends (qualified) on Big Bank stock $900

Dividends (qualified) on Big Gas Company stock 490

Dividends (nonqualified) from Mango Mutual Fund 145

Interest on Washington State Municipal Bonds 700

Interest on Big Electric Company Bonds 650

Ivan went to a local Indian casino and won $5,900 playing Keno. Ivan had no other gambling income or loss for the year.

In February, Irene received $50,000 in life insurance proceeds from the death of her friend Sharon. In July, Ivan's uncle Igor died and left him real estate (undeveloped land) worth $72,000. Five years ago, Ivan and Irene were divorced. Ivan married Mary Molar, but that marriage did not work out and ther were divorced a year later. Under their divorce decree, Ivan pays Mary $12,600 per year alimony. All payments were made on time during 2015. Mary's Social Security number is 667-34-9224. Three years ago Ivan and Irene were remarried.

Bitewing Dental Clinic, Inc. pays Ivan's Dental License fees and membership dues to dental organizations. During 2015, Bitewing paid $1,240 for such dues and fees for Ivan. Irene was laid off from her job on January 2, 2015. For 2015, she received $3,850 in unemployment benefits. Ivan and his family are covered by an employer-sponsered health insurance plan at work. Bitewing pays $700 per month premiums for Ivan and his family. During the year, Irene was in the hospital for a few days to have her appendix removed . The bill for the surgery was $5,100 of which the health insurance plan reimbursed Ivan the full $5,100.

On September 1, Irene opened a retail store that specialized in sports car accessories. The name of the Store was "Plus Two Cones". The store is located at 617 Main Street, Spokane WA. The store uses the cash method of accounting. Her income and expenses for the year are the following Sales of Merchandise $63,400 Inventory, September 1 (Purchased in August)40100 Inventory, December 31 -38100 Purchases during the year 37,800 Sales Returns and allowances 600 Store Rental 7,550 Office Expenses 1,380 Insurance 800 Advertising 3,100 Employee Wages 3,350 Payroll and other businesses taxes 505 Interest on bank loans to open store 2,760 Accounting fees 310 Utilities 992 Telephone 800 Maintenance 427 Miscellaneous 65 In addition to the above items, Irene Incurred Travel expenses to attend a seminar on sports care accessories. She spent $300 on airfair, $400 on lodging, $90 on a rental car, and $150 on meals. Irene has proper receipts for these amounts, Irene drove her 2006 Ford Explorer 1,631 miles for business related to "Plus Two Cones". The explorer was driven a total of 17,172 miles is 5,000 miles spent commuting to the store. Irene has the required substantiation for this business mileage. She uses the standard mileage method. In July, Ivan loaned a friend $7,000 so he could by a car. Ivan's friend lost his job in 2015 and stopped making payments on the loan. He plans to start making payments again however, with additional interest as soon as he has new employment.

Tax returns to be prepared for the above with schedules. Also include chapter 4 and chapter 5 of cummulative software problem from 34th edition of Income Tax fundementals 2016-Whittenburg/gill/altus-buller