Question
I need Help!!! This is the third part of a six part problem that will allow you to prepare the 2014 tax return for Laurie
I need Help!!!
This is the third part of a six part problem that will allow you to prepare the 2014 tax return for Laurie and Lynn Norris. As with the previous parts, this part of the problem will ask you to prepare a portion of their tax return. You should complete the appropriate portion of each form or schedule indicated in the instructions. The following basic information is provided for preparing their 2014 tax return:
1. The Norrises contribute $250 to the political campaign of Fred Smithers who was running for Santa Fe city council.
2. Lynn spent $4,300 in lawyer and accounting fees to investigate the possibility of acquiring a competing handyman website company. Due to legal constraints, Lynn was unable to purchase the company.
3. Lynn began his business in October 2012. He uses a room in their home to operate his business. The room is 300 square feet of the 2,400 total square feet of the home. The Norrises incur the following expenses related to their home:
Mortgage interest $7,000
Property taxes 2,200
Insurance 850
Gas and electric 1,600
Repairs and maintenance 400
Cable television 350
Phone ($10 per month for a separate phone number for the office) 245
House cleaning 650
The home was worth $215,000 in October 2012, their basis is $175,000, the value of the land is 15% of basis, and the applicable depreciation percentage is 2.564%.
Required: Based on the information provided above, only fill out the appropriate portions of Form 1040 Schedule C and Form 8829.
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