Question
I am having trouble with this question.. i am trying to fill out the 1040 form and cant get lines 7- 22 to add up.
I am having trouble with this question.. i am trying to fill out the 1040 form and cant get lines 7- 22 to add up. I also need some help with 38-47
Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Janes Social Security number is 123-45-6789. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. During 2013, Jane had the following income and expense items:
- a.$100,000 salary from Legal Services, Inc.
- b.$20,000 gross receipts from her typing services business.
- c.$700 interest income from Acme National Bank.
- d.$1,000 Christmas bonus from Legal Services, Inc.
- e.$60,000 life insurance proceeds on the death of her sister.
- f.$5,000 check given to her by her wealthy aunt.
- g.$100 won in a bingo game.
- h.Expenses connected with the typing service:
Office rent
$7,000
Supplies
4,400
Utilities and telephone
4,680
Wages to part-time typists
5,000
Payroll taxes
500
Equipment rentals
3,000
- i.$9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).
- j.$15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2013. Jane had paid $14,000 for the silverware on July 1, 2004. She was reimbursed $1,500 by her insurance company.
- k.Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2010. Joan declared bankruptcy on August 14, 2013, and was unable to repay the loan. Assume that the loan is a bona fide debt.
- l.Legal Services, Inc., withheld Federal income tax of $16,000 and the appropriate amount of FICA tax from her wages.
- m.Alimony of $10,000 received from her former husband, Ted Smith.
- n.Interest income of $800 on City of Boca Raton bonds.
- o.Jane made estimated Federal tax payments of $1,000.7-307-31
- p.Sales taxes from the sales tax table of $946.
- q.Property taxes on her residence of $1,100.
- r.Charitable contributions of $2,500.
- s.In November 2013, Jane was involved in an automobile accident. At the time of the accident, Janes automobile had an FMV of $45,000. After the accident, the automobiles FMV was $38,000. Janes basis in the car was $52,000. Janes car was covered by insurance, but because the policy had a $5,000 deduction clause, Jane decided not to file a claim for the damage.
Part 1Tax ComputationCompute Jane Smiths 2013 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Forms 1040 and 4684 and Schedules A, C, and D.
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