Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How would I set this up? Question- Bus 208 : Federal Taxation Tax Return Project Luis Perez is an instructor at the City Colleges of

How would I set this up?

Question- Bus 208 : Federal Taxation Tax Return Project Luis Perez is an instructor at the City Colleges of Chicago. Luis is in his 20s and enjoying it! He was married to Sandra on January 1, 2006. Sandra is a full-time student and also in her 20s. Due to irreconcilable differences they were divorced on December 31, 2020. The divorce decree provided the following: A condominium purchased for $80,000 by Luis several years ago with a fair market value of $125,000 transferred to Sandra on December 31, 2020. This condo was previously used as a second home by Luis and Sandra. Monthly payments to Sandra of $750 beginning January 31, 2021 and ending at the date of her death. Luis did not remarry in 2020 considering he did not have sufficient time to find a new candidate. Luis social security number is 111-33-1112. Sandras social security number is 111-33- 1113. Luis current address is 30 E. Lake Street, Chicago, IL 60601 Luis has the following income and withholding information from his full-time position as an educator: Salary from City Colleges of Chicago $40,000 Federal income tax withholding 6,000 Federal social security and medicare tax withholding 3,672 State income tax withholding 1,200 Luis has the following information available for banking activities: Interest income from Escandalo Bank 150 Interest income from City of Chicago Municipal Bonds 375 Interest income from redeemed U.S. Savings Bonds 525 Luis has the following information expenditures: Mortgage Interest 7,500 Credit Card Interest 600 Real Estate Taxes 3,400 Cash Charitable Contributions to qualified charities 800 Non-cash Charitable Contributions to qualified charities 450 Cash Charitable Contributions to homeless on street 100 Political Contributions 250 On June 27, 2020, Luis received stock valued at $30,000 as an inheritance from his deceased uncle, Samuel. Samuel purchased the stock several years ago at $1,000. Page 2 of 2 Luis occasion visits casinos for recreational purposes. His total winnings for 2020 for playing slot machines were $1,150. The casino was required to withhold federal income tax of $150. Luis is also a big professional football fan and participates in an office pool at his job. During the year he won $600 from the office football pool. Total gambling losses for the year was $3,600. Luis is an avid chess player and participates in tournaments periodically. During 2020, he participated in 3 tournaments and was awarded a cash prize of $750. Mr. Perez is also a fitness fanatic. He participates in several races throughout the year. In a local marathon race he came in first in his age group and won a GPS watch valued at $300. Mr. Perez also received birthday gifts from his family, friends, and former students totaling $2,000. Luis birthday is December 26th . Requirements: 1. Prepare a federal tax return including supporting schedules for Luis using the tax forms, relevant amounts, and tax rates for tax year 2020. 2. Use the fill-in tax forms found at the IRS web site (www.irs.gov). You are not allowed to use a tax preparation software. 3. Make sure you include a separate page showing the income tax computation using the tax rate schedules for 2020. 4. If you believe there items that should be reported on other income, prepare a separate schedule listing those amounts individually along with a total. Include a heading with: name of the taxpayer, social security number, tax year 2020, and tax form 1040. 5. Prepare a cover letter summarizing his return.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Strategies For Financial Services Compliance

Authors: Annie Mills, Peter Haines

2nd Edition

1118906136, 978-1118906132

More Books

Students also viewed these Accounting questions