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how would you set up these schedules on a hypothetical Tax Form Sarah owns and rests out a small apartment building. This year Sarah received
how would you set up these schedules on a hypothetical Tax Form
Sarah owns and rests out a small apartment building. This year Sarah received $62,000 of rental payments from tenants, and she incurred S23.300 of expenses associated with the rental comprised of the following items: $5.900 depreciation, $7,100 property taxes, S2.700 insurance, legal services $2.300, S1,100 repairs, and $4.200 utilities A few years ago, Sarah acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: 68.200 of interest income from US Treasury bills and $2,500 interest income from City of Denver municipal bonds Sarah borrowed S47,000 from a broker to make purchases of common stock investments although none of the stocks have paid any dividends yet. During the year, she paid the broker $3,100 of interest related to the loan, Sarah had two stock sales during the 2021 tax year: 1) Sold 400 shares of ChemCo Corp.common stock for S13 per share. All of the shares were originally purchased for S100 per share on May 12, 2017; and 2) Sold 90 shares of Home Depot, Inc. common stock for $337 per share on October 11 The shares were inherited from Sarah's aunt on March 21, 1997. Sarah determined that her adjusted basis is $12.78 per share, which includes an adjustment for any stock splits. (continues on the next page) Sarah is also a skilled chef who has developed a new way to prepare great tasting, low-carbohydrate meals using fresh ingredients. She provides instructional services by teaching cooking classes during the summer months when school is not in session and reports this activity as a sole proprietorship business on Schedule Cusing a principal business code of 611000 in Box B. Activity for the year included: gross receipts - $46.500, legal services $399, office expense S810, advertising 53.150, supplies - 54.333, and the purchase of a portable convection oven on June 15 used 100% for business purposes - S1,475 (claim the largest depreciation deduction possible). In addition, Sarah occasionally uses her personal car for business. Assume that Sarah maintains a mileage log showing that she drove her car a total of 10,000 miles during the year including 1.200 miles for business purposes (use the 2021 standard mileage rate of $0.56 per mile). Sarah does not maintain a home office. In addition to having S10,000 of federal income taxes withheld by her employer on her Form W-2. Sarah made a total of $12,000 of estimated tax payments during the year (53,000 on cach of the duc dates for quarterly estimated tax payments) Taking all of the previous information into account, prepare a complete and accurate U.S. federal income tax return (but not the state and local returns) for the 2021 tax yeat. Because not all of the 2021 versions of the tax forms are available, use the 2020 versions of the forms when needed. The forms and schedules will be made available in the Tax Forms folder in the Content area of our Eleaming site and can also be downloaded and printed from the Internal Revenue Service (TRS) website http://www.it.) Form 1040-pages 1 and 2 Schedule D-Capital Gains and Losses Schedule 1 - Additional Income and Adjustments Schedule E - Supplemental income and Loss Schedule 2 - Additional Taxes Schedule SE -Self-Employment Tax Schedule 3 - Additional Credits and Payments Form 4562 - Depreciation and Amorturation Schedule A Itemized Deductions Form 8949 - Sales & Dispositions of Capital Assets Schedule B - Interest and Ordinary Dividends Form 8995 - QBID Simplified Calculation Schedule C-Profit or Loss from Business Completing the forms manually in pencil is acceptable for this project (typing is NOT required). As you prepare the forms, please use any individual/business names, addresses, and fictitious Social Security Numbers (SSN) that you wish. Check figures will be provided and discussed during our class sessions including Schedule C Net Profit, AGI, and Taxable income Step by Step Solution
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