Hello! I need help with this project. The first part have to be done for this week. Thank you!

South-Western Federal Taxation 2016: Individual Income Taxes 1 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Appendix E Practice Set AssignmentsComprehensive Tax Return Problems PROBLEM 1 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. 1. John represents several national casualty insurance companies on a contract basis. He operates this business on the cash basis. He is paid a retainer and receives additional compensation if the claims he processes for the year exceed a specified number. As an independent contractor, he is responsible for whatever expenses he incurs. John works out of an office near his home. The office is located at 1202 Motel Road. He shares Suite 326 with a financial consultant, and operating expenses are divided equally between them. The suite has a common waiting room with a receptionist furnished and paid by the landlord. John paid his one-half share of the 2014 expenses as detailed below: Office rent $11,600 Utilities (includes telephone and fax) 4,300 Replacement of waiting room furniture on April 22 3,600 Renters' insurance (covers personal liability, casualty, theft) 1,400 Office expense (supplies, postage) 740 New Toshiba copier on February 7 300 Waiting room coffee service (catered) 280 Waiting room magazine subscriptions 90 For his own business use, John purchased a $2,100 laptop computer on June 17 and a $1,200 Nikon camera on February 5. Except for his vehicle (see item 2 below), John uses the 179 write-off option whenever possible. John has no expenditures for which he is required to file Form 1099s. 2. On January 2, 2014, John paid $31,000 (including sales tax) to purchase a gently used Toyota Camry that he uses 92% of the time for business. No trade-in was involved, and he did not claim any 179 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 2 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. expensing. John uses the actual operating cost method to compute his tax deduction. He elects to use the 200% declining-balance MACRS depreciation method with a half-year convention. His expenses relating to the Camry for 2014 are as follows: Gasoline $3,500 Auto insurance 1,700 Interest on car loan 820 Auto club dues 325 Oil changes and lubrication 210 License and registration 190 In connection with his business use of the Camry, John paid $510 for tolls and $350 in fines for traffic violations. In 2014, John drove the Camry 14,352 miles for business and 1,248 miles for personal use (which includes his daily, round-trip commute to work). 3. John handles most claim applications locally, but on occasion he must travel out of town. Expenses in connection with these business trips during 2014 were $930 for lodging and $1,140 for meals. He also paid $610 for business dinners he had with several visiting executives of insurance companies with whom he does business. John's other business-related expenses for 2014 are listed below: Contribution to H.R. 10 (Keogh) retirement plan $8,000 Premiums on medical insurance covering self and family (spouse and children) 4,600 Premiums on disability insurance policy (pays for loss of income in the event John is disabled and cannot work) 2,400 State and local occupation fee 450 Birthday gift for receptionist ($25 box of Godiva chocolates plus $3 for gift wrap) 28 4. Anne earns $32,000 working as a registered dietitian for the Aitkin Public School District. The job she holds, manager of the school lunch program, is not classified as full time. Consequently, she is not eligible to participate in the teacher retirement or health insurance programs. Anne's expenses for 2014 are summarized as follows: 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 3 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Contribution to traditional IRA $5,500 Job hunting expense 720 Continuing education program 350 Membership dues to the National Association of Dietitians 120 Subscription to Nutrition Today 90 In order to work full time and earn a larger salary, Anne applied for a position as chief dietitian for a chain of nursing homes. According to the director of the recruiting service she hired, the position has not yet been filled and Anne is one of the leading candidates. The continuing education program was sponsored by the National Association of Dietitians and consisted of a one-day seminar on special diets for seniors. Anne drove the family Chevrolet Malibu 930 miles on job-related use, out of a total of 8,670 miles driven for the year. The Millers purchased the car on July 11, 2012, for $23,400. Anne uses the automatic mileage method for computing any available deduction for business use of the car. 5. The Millers have supported Gary Simon (Anne's widowed father) for several years, appropriately claiming him as a dependent for tax purposes. On December 27, 2013, Gary suffered a massive stroke. The doctors did everything they could for Gary, but he died in the intensive care unit of Riverwood Hospital on January 8, 2014. In January and February of 2014, the Millers paid the following for Gary: medical expenses of $11,800 not covered by Medicare ($6,000 incurred in 2013 and $5,800 in 2014) and funeral expenses of $15,300. Gary's health insurance was limited to his Medicare coverage because the Millers' medical insurance (see item 3 above) only covered John, Anne, and their sons. Gary's will named Anne as executor and sole heir of his estate. 6. One of the assets that Anne inherited with the transfer of Gary's estate was his house. Upon the advice of the financial consultant who shares office space with John, the Millers decided to convert Gary's home into a furnished rental house. After several minor repairs (e.g., touching up the paint on the interior walls, replacing various window screens, pressure washing the brick exterior, etc.), the property was advertised for rent in the classified section of the local newspaper on March 1, 2014. The repairs cost $720, and the newspaper ad was $360. Based on reconstructed records and appraisal estimates, information about the property is as follows: Original Cost FMV on 1/8/14 House $40,000 $220,000 Land 10,000 50,000 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 4 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Original Cost FMV on 1/8/14 Furniture and appliances 21,000 14,000 7. Gary's former residence was rented almost immediately with occupancy commencing April 1, 2014, under the following terms: one-year lease; $2,400 per month due the first day of the month; first and last month's rent in advance; $2,000 damage deposit; lawn care included but not utilities. The tenant complied with all terms, except the December rent payment was not made until January 1, 2015the tenant took an extended holiday trip that started on Thanksgiving Day (November 27) through Christmas Day (December 25). Expenses in connection with the property were as follows: property taxes, $2,600; repairs, $320; lawn maintenance, $540; insurance, $1,800; and street paving assessment, $2,100. The property is located at 12120 Lake Road, Aitkin, MN 56431. (Note: If you are using H&R Block software, input 365 in the \"days owned\" box and in the \"days rented\" box. Otherwise, the program will apportion the expenses inappropriately.) 8. In early December 2013, a friend advised John to buy stock in Pioneer Aviation, Inc. (PAI). At that time, PAI was in serious financial straits and was headed toward bankruptcy. Nevertheless, according to John's friend, the value of the corporation's underlying assets was such that the shareholders were bound to recover considerably more than the current market price of $.50 per share. Excited at the chance for a \"sure\" profit, on December 15, 2013, John purchased 20,000 shares for $10,000. In September 2014, the trustee in bankruptcy announced that the stock was worthless and that even some of PAI's preferred creditors would not be paid. 9. On June 14, 2014, the Millers sold 500 shares of Garnet Corporation for $17,500 ($35 per share). They owned 1,000 shares, acquired as follows: 500 shares on November 5, 2013, for $25 a share and 700 shares on April 5, 2014, for $30 a share. The Millers did not instruct their broker as to which shares to sell, so Form 1099-B for this sale reported $12,500 basis for these shares. 10. One month before she died on April 14, 2005, Violet Simon (Anne's mother) gave Anne a coin collection. Based on careful records that Violet kept, the collection had a cost basis of $9,000 and a fair market value of $18,000 at the time Violet passed away. On February 12, 2014, the Miller residence was burglarized and the coin collection was stolen. The Millers filed a claim with the carrier of their homeowner's insurance policy for $24,000 (the current value of the collection). Unfortunately, all they were able to collect was $10,000, which was the maximum pay-out allowed for valuables (e.g., jewelry, antiques) without a special rider attached to the insurance policy. 11. In her will, Violet Simon (see item 10) left Anne a vacant lot on Mississippi Road. Violet had paid $15,000 for the property, and it had a value of $19,000 when she died. Violet had purchased the lot because it was adjacent to a school that she expected to expand. By 2014, it has become clear that the Mississippi Road area of Aitkin is not growing and that no school expansion will take place. Consequently, on July 1, 2014, Anne sold the lot for $19,000. Not included in this price are unpaid property taxes (and interest on the unpaid taxes) of $700 on the lot, which the purchaser assumed and later paid. Form 1099-B did not report the basis of this property. 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 the 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 5 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. referrals 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 1099-MISC 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 1099-INT): 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 1099-DIV) 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. 15. Payments made for 2014 expenditures not mentioned elsewhere are as follows: Medical: Medical: 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 6 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Copayment portion of medical expenses $1,300 Dental (orthodontist) 1,200 Taxes: State income tax (see item 17 below) 3,456 State sales taxes 1,120 Property taxes on personal residence 3,800 Interest on home mortgage reported on Form 1098 4,200 Charitable contributions 3,600 The Millers' medical insurance does not cover dental services. The Millers pledge contributions of $1,200 per year to their church. In 2014, they paid the pledges for 2013-2015. During 2014, the Millers drove the Malibu 270 miles for medical purposes (e.g., trips to the hospital, doctor and dentist offices) and 320 miles delivering meals to the poor for Meals-on-Wheels, a qualified charity. 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 W-2 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 7/6/2016 12:01 PM South-Western Federal Taxation 2016: Individual Income Taxes 7 of 13 https://jigsaw.vitalsource.com/api/v0/books/9781305893573/print?from... PRINTED BY: jcarnahangirondi@devry.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. 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 Requirements Prepare an income tax return (with all appropriate forms and schedules) for the Millers for 2014 following these guidelines: Make necessary assumptions for information not given in the problem but needed to complete the return. The taxpayers are preparing their own return (i.e., no preparer is involved). The taxpayers have substantiation (e.g., records, receipts) to support all transactions for the year. If any refund is due, the Millers want a refund check sent to them by mail. The Millers had itemized deductions from AGI for 2013 of $16,700, of which $1,500 was for state and local income taxes. The Millers do not want to contribute to the Presidential Election Campaign Fund. PROBLEM 2 David (Dave) S. and Karen H. Brown are husband and wife and live at 4112 Foxglove Drive, McKinney, TX 75070. Dave is a retired petroleum engineer, and Karen is a portrait artist. They choose to file a joint tax return each year. 1. When he retired at age 65, Dave was chief of offshore operations at Pelican Exploration Corporation. While employed, Dave participated in Pelican's contributory qualified pension plan, to which he had contributed $250,000 (in after-tax dollars). Under one of the plan options, he chose a life-annuity payout of $60,000 per year over his life. As part of his retirement package, Dave also received nontaxable health insurance coverage for him and Karen. Due to Dave's expertise in Gulf of Mexico offshore operations, Pelican continues to use his services on a consulting basis (see item 3 below). 2. Karen, an accomplished artist, is well known regionally for oil portraits (business activity code 711510). She paints in the Photorealism style, providing her clients with portraits that are often mistaken for photographs. Painting in this style is very time-consuming. Consequently, her output averages between 15 and 16 portraits a year. Her fee of $3,200 per portrait was set several years ago and never varies. As this is quite reasonable for a Photorealistic oil portrait, she has a long waiting list of clients who have not yet been scheduled for sittings. She does all of her work in the studio the Browns maintain in their personal residence (see item 6 below). Karen is a cash-basis taxpayer with respect to her art 7/6/2016 12:01 PM Objectives The objective is to complete, in four successive parts, a comprehensive federal tax problem of moderate difficulty. Guidelines The Course Project requires you to complete Appendix E, Problem 1, in four parts. Each part will have you complete selected paragraphs from the problem. You must select the appropriate tax forms in Course Resources to complete the project, or use a tax software program. Part I is worth a possible 25 points. Part II is worth a possible 25 points. Part III is worth a possible 25 points. Part IV is worth a possible 75 points. The entire Course Project is worth a total of 150 points. Part I is due at the end of Week 3. Part II, which includes work you did during Part I, is due at the end of Week 5 and includes additional items of Appendix E, Problem 1. Part III, which includes the work you did during Parts I and II, is due at the end of Week 6 and includes additional items of Appendix E, Problem 1. Part IV includes all previously completed items and completes the problem in its entirety. Part IV is due at the end of Week 7. After you have downloaded the tax forms from Course Resources during Week 2 of the course, you are encouraged to immediately begin completing the Part I (Week 3) assignment. Please read the entire problem in Appendix E, Problem 1 before beginning the assignment. It has several paragraphs of instructions. All DeVry University policies are in effect, including the plagiarism policy. Any questions about this paper may be discussed in the weekly Q & A discussion topic. Please see the Syllabus for the late assignment policies. Part I For Part I (due in Week 3), you are asked to use the introductory sentence about the taxpayer and complete paragraph items 12, 13, 14, 16, and 17. You will also need to read the requirements and note that the taxpayer is not making a contribution to the Presidential Campaign Fund. Determine the forms to be completed. The forms are also located in Appendix B of the e-book. Once completed, save your form(s) with the format "Your Last Name-formname.pdf" (e.g., Smith-f2106.pdf). Submit your assignment to the Week 3 Course Project Dropbox. Note: Optional tax software: Please note that DeVry does not provide tax software to complete the project. Using software to complete the project is optional, not required. The forms are provided in Course Resources for your use. The forms are also located in Appendix B of the ebook. Students who desire to use the software to complete the project have the following options. H&R Block At Home: The software is included with the purchase of the hard copy of the textbook. You may use the software disk provided and follow the installation instructions. You may review the student companion website or contact the publisher's customer service to obtain information regarding the purchase of the H&R Block At Home software online. If purchased and used to complete your project assignment, you will need to submit the file created by the software. Save your work as an H&R Block At Home file. Save the problem as a PDF file. Turbo Tax: If you purchased Turbo Tax and completed your assignment as a Turbo Tax file, you will need to submit your assignment as a PDF file before submitting it to your instructor. Part II For Part II (due in Week 5), you are asked to do the following. Use Part I, which you completed previously. Correct your Part I assignment mistakes, if any, based on the solution you were provided by your instructor at the end of Week 4. Complete the following additional paragraph items: 1, 2, 3, 4, and 15. Determine the forms to be completed. You will be including additional forms from Part I and changing forms you have already submitted. The forms are also located in Appendix B of the ebook. Save your file with the format "Your Last Name-formname.pdf" (e.g., Smith-f2106.pdf) and submit it to your instructor via the Week 5 Course Project Dropbox. Part III For Part III (Week 6), you are asked to do the following: Use Parts I and II, which you completed previously. Correct your Part II assignment mistakes, if any, based on the solution you were provided by your instructor at the end of Week 5. Complete the following additional paragraph items: 5, 6, 7, and 8. Determine the forms to be completed. You will be including additional forms from the Part II submission and changing forms you have already submitted. The forms are also located in Appendix B of the eBook.Save your file with the format "Your Last Name-formname.pdf" (e.g., Smith-f2106.pdf) and submit it to your instructor via the Week 6 Course Project Dropbox. Part IV For Part IV (Week 7), you are asked to do the following. Use Parts I, II, and III, which you completed previously. Correct your Part III assignment mistakes, if any, based on the solution you were provided by your instructor at the end of Week 6. Complete the following additional paragraph items: 9, 10, and 11. Determine the forms to be completed. You will be including additional forms from the Part III submission and changing forms you have already submitted. The forms are also located in Appendix B of the e-book. Save your file with the format "Your Last Name-formname.pdf" (e.g., Smith-f2106.pdf) and submit it to your instructor via the Week 7 Course Project Dropbox. Grading Rubrics The following displays the grading rubric for all four parts of the Course Project. Category Point s % Description Documentation and Formatting 15 10 A quality paper will include all of the required tax forms. Organization and Cohesiveness 15 10 The content will be properly entered into the appropriate section and tax form. Editing 15 10 A quality paper will be free of any spelling, punctuation, or grammatical errors. Sentences and paragraphs will be clear, concise, and factually correct. Content 105 70 A quality tax return will have the correct dollar values entered into the correct line items of the tax return. Total 150 10 0 A quality paper will meet or exceed all of the above requirements. Best Practices The following are the best practices in preparing this Course Project. Indicate that you prepared the return at the bottom of page 2 of Form 1040. Disregard the fact that the instructions say the taxpayer prepared his or her own tax return. Use the solutions from prior project parts and make corrections before submitting the next part. Course Project - Some Clarification Dear Class - I realize the instructions for the Course Project can be confusing. I am trying to summarize the requirements for you so that you can start out on a good solid step and not feel like you don't know where to begin! This project will be worked on over the entire session. It will be graded, however, in 4 parts. The project can be found in Appendix E of your text and it is Problem No. 1 that is the subject of the assignment. You will take the information provided in Appendix E and begin completing Form 1040 and other related Schedules and Forms. Forms can be found in Appendix B of your text, at http://www.irs.gov , and also in DocSharing. If you purchased the hard copy of the text that provided access to the H&R Block At Home software, then you can use that, but no other commercial tax software is permitted. You can and should begin working on Part I as soon as possible. For the Week 3 deliverable, you will focus ONLY on the introductory sentence and items 12, 13, 14, 16 and 17. I will post the Appendix, along with the highlighted paragraphs, for your reference in DocSharing. By the end of Week 3, you will need to submit to the DropBox (1 file) that contains multiple PDFs which should include: Form 1040, Schedule A, Schedule B, and Schedule C. For the Week 5 deliverables - you will first want to update your Week 3 forms so that they reflect the EXACT figures that my solutions do. I will return solutions along with your graded work during Week 4. Once you have your forms updated to match mine, then you will begin updated those forms to address items 1, 2, 3, 4 and 15. By the end of Week 5, you will need to submit to the DropBox (1 file) that contains multiple PDFs which should include: Form 1040, Schedule A, Schedule B, Schedule C, and Form 2106 and Form 4562. For the Week 6 deliverables - you will first want to update your Week 5 forms so that they reflect the EXACT figures that my solutions do. I will provide solutions at the beginning of Week 6 and will return graded Week 5 work by the end of the week. Once you have your forms updated to match mine, then you will begin updated those forms to address items 5, 6, 7 and 8. By the end of Week 6, you will need to submit to the DropBox (1 file) that contains multiple PDFs which should include: Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, Form 2106 and Form 4562. For the Week 7 deliverables - you will first want to update your Week 6 forms so that they reflect the EXACT figures that my solutions do. I will provide solutions at the beginning of Week 7 and will return graded Week 6 work by the end of the week. Once you have your forms updated to match mine, then you will begin updated those forms to address the final items 9, 10, and 11. By the end of Week 7, you will need to submit to the DropBox (1 file) that contains multiple PDFs which should include: Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, Form 2106 and Form 4562. Don't wait until Sunday of the week it is due to ask a