I need to complete phase 3 of the schnappauf family case.

PHASE lI-CHAP'I'EIIE 5-5 This is the seeenci phase eF the te:t tenIIn prehlem Ire-u began at the end efhapter 1r. Th' phase uf the tax return ineurputatc: the maten'el 'IJm I: hepters 5 15 TI", and B be [well-riding yen with infennetien eeneeming the Sehnsppeu' Iietiuetiem I'er ll 'l'hei.I preside gene with the renewing inmnine-n l. IIJ-yee mites children's bunks II a Tariff}? IJf publishers. 5111: has been sell- empleyeei sine: EMT. I'Is e. 'eelerbee writen lei'ee incurs ee-sts eseeeiatecl with pre- paring a manuscript list which she dues net yet have : mntrect. During the year, Inge: makes 4 business trim. eeeh 5 days lung, In meet smith veries publishers. Fer shelter trips that ere elerser te heme, she either drives at tnltes the train and retutns the same day. n December HI, 11115, Inga.- receives an advance [see helewjl en her next beret. Under the eemreet. Ieyee is sehctiuieei [D- hegin writ cm the bun-nit em Fehmat'y 1, 21115, and Must have it mmpletecl by Nurember 5D, 21.'l'he Sehmmui's' heme has 2 telephenes. leg-gee has a separate phene num- ber fer her business. The inl'e-rnistien em Ieyce's llllilni' is listed better. wt'hhmmhhnlnm-nhr hhmhHHmnwhwhhk-n- CUE): Mann-I hull-me nun-Hm I-I-u-m-II nummmawmew-mMuuss ir-i-I-II-u spanner-Ia lpp-mtll: A. Ewelties {Exhibits Iii-IO te Iii-ll} Publisher's advance semi: iee supplies I?\" '1' rain tickets 535 Airline {4 trips]- lf Ledging {ll nights] 2,240 Heels {11 days) ll] Telephtrne {$23 IInIeI'IthII.r fee per phnne line] It??? IntenIet prewider 5?\" Cell phnne, ineluding bmine eel]: 91.3 Business-related ptntsgc B? Pntingfenring [+52 Legal Fees 2,000 Interest rm autn 15-1 1. 3. I5. n January 2. .2015, Jesse purchases a net'sr ear tn use in her business. The eat. a Velster, casts 31 530D. Ieyce pays 52,213] in trash and nances the balance thmugh the dealer. She uses the car 45 percent uf'te time at business and elrit' a tetal ei' [0500 miles during 2015. The rental expenses fer the l miles elrit'el't ant: repairs and maintenance.r SEED; insurance, 591i]; and gasrtline, 513%. The eerreetdepreeianen expense Fer ZINE is 54534 [315.1% 3-: 4591i I Ni}. leyce's efee is Incated in a separate rcrcrm in the Items-e and ucmpies 3H scluare Feet. The tets square Eiserage erfthe hearse is seen- The Sel'lnappau purchased the heme cut Jul}.F i", Ill-Ell, hr MIME. The leca] practice is ten allecate ll] percent ctfl'he purchase price ttsland. The depree'estiem percentage For the rather: is [Hi-15454. When lesee started. her busine cnt January.r l. IMF. the Fair market 1nilne e-fthe huuse was 51mm.The tats] huusehultl expenses liar EDIE are as allun's: Heat 51 . I 3\"} Insurance 1.41311 Elcem'city F40 Repairs tn kitchen 3.l1'.]|] Cleaning 1,560 . Bill began work an his MBA at Dem-ill: University. He enmlletl :in use courses, and paid 5331\""?! in tuit'ien and 53m I'er heels. . Bill and lessee each centribute the ntasirnum te their respective libs. aeccrunts in 2m 5- The IRA aeeeunt is Ins'ee's enls retirement vehicle. Eill's basis in his 1M befare the current year's cenlbutien is Simll, and legrce's basis is 53mm. The Fair marlcet 1ralue uf'EilI's \"M. an [Eflfl is $41,?30, and the Fair market value efluy'ee's [IL-1 is 553,100. In additien. Bill and lettuce contributed 52,000 tr: a Cut'erdell Esluealinrl Savings Aeeeunt ar Thomas- Dn lune l5. M15. the Sehnappauii' 30H sentient wag-en 'is totaled in Hurricane Ann. The cat was purchased liar 523,111") in Net-ember EDIE. The Sclmamsauis receive a check fer 52] Jill! Ii'crm zippy [nsuranee Ctlu'npnarn.I that represents the fair market value ef the car minus 1 SEE deductible. [in lune 2e, lIE, they replace the ear with a EDI 5 statics" wag-nu- The new eat costs 53] ,d-l], and the Schnappaufs receive a rebate cheek lines the car's manqu-cturer fur 51,500. 'I"I I. I I f.l. i".I...... r! I. J . i'.I'I ..I 5'. The Eajm'um aloo- domogcs pm of the 5.:thst honor. A m: on; and makcs a. had: in tho rainfall-ow 1hr kitchcn. Ware: dawns-:5 tho kitchcn. causing III: new dishwashm' in short DUI, and :it has II: but: replaced. In addition, the limo; lrum our has to b: rcploood.111c cost ofxh'ng tho hob: in tho mf'is SSJJOEI. Tho Ethiopia-211.1% rem-ire 51,501] {SEMI} rep-air cos: minus S doductiblcj to x the roo Infommion cumming tho dishmshcr and tho oor is as follows: Data: Original PM? FM? Pram Acquired. Cm: mm Afro: Edmbummont bio-hum: Sfafl S 344:! 5 H0 5-0- 1533!} Fluor 33115315 51,300 51,550 s-o- 535:} Kim-ml H'rI LII-All huh: Inn-d Hr. Finn-u. nI. H'm- in -| urn-I. Inn Ira-inh mn hi mmmhmhh nun-Mn: CMFQ'IEH I'- m urin- Iululqul Hug \"in\" hum nil-mu.\" I'll-H.9- D\" mmhllnw null-HI mung-liq maltyu Wuhan-\"i. Wm A5 3. The Schnappaul's incur th: f'ullnrw'mg muodical cxpcmrs {bczirc mnsiclcring tho smo reimbursement {hay roroirc From their health ins-mourn: polirg'}: Medical premiums $3,311\"! Doom-rs Lana Chiropractor 65!} Dcnl'isr 1.9M Vol: x: {55.111119 do; Suid 35H Pruscpl'iun drugs 34- [Jrcrihr-cou not: drugs (aspirin, oough syrup} \"'5 In addition, Bill purcham an Emnlignor machin: for WW. 111a: machin: m rommmcndcd by thc chiropractor In hclp strengthen BiH's back muscles. 9. '11:: Schnappou pay that: following pmpcrw torts: Wakccld house 5] LIED IE":In'JiI:|.r cor Hand 11}; Bill {ad volumm} 430 Joyce's our {ad I'illltl'} 52!} 11}. Th: Schnappanl's reeeie: twer Fenn l'il's far the east eri'interest en bank. leans. 1i. Theyr also pay interest em. their perennial nedit cards. le'erstm Tnlst ig {Exhibit A- iBi't'akeeld hnuse} leersen Tntst 10% {Exhibit h-HHerm: equity: Dempsey's Department Store M'h'ing aeemtnt $19] Breeies' Bargain Basement: remitting seemtnt tin? le'ersun Trust bank card 211 The preeeeds 'em the heme equity lean were used te renm'ate their Ie'tehen and pa}- I'er Tetn's tnitien tn private sehenl. The interest en the pl'lil'l el' the Juan used For private tithe-til tuitien i5 Eli-I11]. Bill and leave: malt: eesh eharitaiale eentributiens ear the United Fund Campaign {SEEM}, Melade Unit-ersiq' [SE-Ill}, Tmnetm University- {SL900}, and Ehrist the King iutreh in Kings-ten. 1H. {Sim-D]. The Eehnappauiit have deeumenta- tie-n tn verify their :ash Emitributilllse Thee else tie-nah: preteen-y tn the Salvatien Hume all My 15., 2|}! 5: Frauen-ere}r PM? lllilrigirtai Cast Date inquired Antique tab-it: 51-10- 5125 lfifD-Ii liishwasher [all Hill fef Seth's bed 1ii'lil' Bill] lel-lfl Men's suits [2} HI} 54!} Van'tms Th: Sah'atien Finn}.- aeltnmvledges that these amentnes represent the Fair math-er value nl' the due-seed items. 13. The Sehnapp-aui inenr the renewing expenses: Type Ame-ant lI-Il tat: prepsraliun fee {paid in llj 5 SCH] Safety deposit bets investment ieernals 3311] Investment atlviee 1,0513 Easiness publieatiens {Bill} ETE Gambling Ins-res 3,4513 13. Because lea-re: is self-empleyed. theyr make federal estimated tea payments et' 521D per quarter an April 15, l1511une IS, 2915, September 15, EDIE, and Ianuartr l5, ll. The}.- alsn malt: estimated payments uFSlE per quarter to the stat: er" Elwd: Island en hptil 15, 2015. inn: 15, 2015, September 15., 31315. and Deeernlrer 3L Zl 5. PHASE Illa-CHAPTERS 9-1 2 This :is the third and nal phase cf the SchnappauHamily's ta: retun't. Thk phase incur pet-rates the material in IShapters '5'. ll}. ll. and 12 requires you to analyze the variptts types afprepertt' tram-tims discussed in these chapters. 1. Dr: February II, 1015, Bil] inherits his Etd'ter's summer home. The hen-um, Iterated in South Lake Tahne. Net-"aria. has a fair market value DFSEEWIFDEI at the date of his father's death. His parents had purchased the huuse in 195"? For $140,121\") and nude Slll wnrth tifespital impms'ements tea it. Tut-tent}- pelt-em (If the total value pt'the prepertgr is attributable tn:- the land. Beeause Bill and lame ultimately waubd like tet- use the prep-err}.r as a wearinn heme, they decide to rent it out. Bill actively participates in the nunagement pt'the property. 'l' he pretense].r is rst ather- risen for rent an March 1, EDIE, but is net rented until April 15., 2:115. Bill pre- sides the lit-limiting ineeme and expense init'armatipa liar the Lake Tahae rental PW\"?- Rent samur- Bepairs 45.350 Management I'ee 4.3m) ['tttnpert].r tastes Iel Insurance seat:- In ldditil'l, Bill buys a new stove for SLBDD and a new refrigerate): for 51,431 on March El}, 2015. WM'IHh-HIHHH-HhmlHlnmn-HH-r hhmmmmwwhwhhH-rmw CC'EH'IIQWW mam")! mn-hmuhQ-teHmhum #Hmnwwmwlumwuu Iwumwt 1. The Sehnappttu receive Farm IWIB [Exhibit alj from Pebble Beach [I'I'L'CS' tare Far the 55h.- et'eerere] 5eeuriu'e5. Details cm the 5eeuritie5 sales are prerided heluw. The selling price listed is net efhmlterege eummieeitme and represents the emeunt the Sehneppeui'c actually receive ti'e-m the mic. Date Purchase Smelt Acquired Date Enid Sale. Price Price 150 shares Pzer Cemeterien 5311392 $315315 5 .5 * 50055555155n15nn55555 e35e39? 10355315 ]?JED -- 5D eiutct Neel-:1 tiflf'i' l3'233'l 5 525 LED!) liehmmiImnnmn 4355315 931315 90D 5300 15-0 51mm 'l'eittttln 5'3] 1315 [033315 1031\"} 5.1110 511:: Shares 1455535 1353M 153551315 5,125 5,151:- "|-'I'l-ie-1 impure FHIJ-l'ltli humility-nuke IJ. lW1.'rtJrnrhrI'li'lefnli'l'rl'plr'll'l met thl1 hrIu-Ihequit'rdmelelirrJF. Im.h51~m.tthe debrell''rrli.teirlurhrt unrefined-edit lm. in hauler III\". ['rer Gentle-tutu Heel: I-I'Iii't] zlr I. \"TheSrhm'utth-quirrd sen-11m: ul'pttertcl] nut}: in Tune internment liar-5.7.8 [H.M'aerlhe preheertlherteerhtdamlhir l'-ebnrhd'trid-rntl. 3.. Dn May 13, 2D] 5, Juyt'e PtlrtthnSc-E :1 eumputer :15th Fur 553111]- 5111: ethic} huge 51 eeler printcr3'eepicr3'ut machine lint MEI]. Mi the equipment is used eatelut-irch.r in her heeinem *1. n June 12, 3015. Inirce sells her nlel enmputer system I'er $3013 and her printer fer Eli-'5. She had acquired the eemputer ere-tern rut-cl printer en February ]E, 1012, For 55,5110 and Eli-15, reqreeth'el'f. When the Sehmppau prepared their EDIE tux tentrn. they.r elected m expense the eemputcr and printer using Sectien 1W. The enmputer 5y5'ten'1 and the printer \"WEE! used exclusively in her business- 5. Jeree reecher :1 Schedule HI {Exhibit 15-151 ll' her interest in the Iiitiiiture- teetaratimt hueineee. I55 ther inermtttien: :. The rental prepem' 1'11 Lalte Tehere i5 Ieeeted 31 Hill Finite Drive, Seuth Lehc Thhuet]9?} wahtkfnrder Te eemplete pheee III1 )'ll need the Fellmring additiemei lit-r1115: Schedule F. and Bernie 45151 and 3532. 1fem new here all the iul'ennatimi neeem-y TD- cernpie'te the schedule: that Emu elicl nut nish in phase: [ and IL 'I'HE SCHHAPPAUF FAMILY [It 21115., Bill and just: Sehnoppnuflire in Wakeeld, [LL Bill is 531 :Ind Inst-re is El. Bill is :1 disttiet ssies manager or USE? Equipment lHorn-oral:titIIn. a ltode island rm that menutitetures and distributes gaming equipment. Jozree is a self-employed author of tiiildren's books. The Schnapps-\"1's have three ehiielren1 Will, 2] . Dan. 19. and Tom. \"5. [n Fhfl' 20115, the Sehnspp-auts provide the Following bssie intbtntstion for proper ing their ll federal income to: return: 1. The ehnopmuf's use the est-h method of stemming and ii]: their return on n eslendshyesr basis. 1. Unless ntherwise stated, assume that the Sehnnppsul's wont to minimise the cur- tent year's to: liability. That is. they 1would lilte to desr ineonte when possible and take the largest deduetitms possible, a pnerim titey hot-e JlJmtred in the post. 3. legree's Seeisl Security number is 3?] "1-1-5201 4. Hill's Social Security number is 150-52-54o. 5. 1It'li'ill's Soeisl Seeurity number is 3?: rid-It's] ] . IS. Don's Soeinl Beauty number is 3??-42-3I1-1L 'F. Tom's Soeisl Seettritr number is STE-d'EI-ol l. E. The Seltnnppsul's do: not have any foreign bank seemlnts tJr fureign trusts- 9'. Their address is 2? Horthnp Street. Wakeeiel. li..l. {\"23\"}. II]. The Seltnsppeufs do not wish to euntribute to the presidential eleetion esmpaign. PHASE ICHAPTERE 1-4 The rst phase ofthe on: return problem is designed. to introdnee you to some of the too: fttrtns and the suppnrting dueurnentsliem anrrns W-l, H'.l".il"5laII'~iT1 etc.) needed to: tame plot: :1 bnsie to: return. The rst lions ehopten tinens on the ineottte ospeets ot'indisitlttol tssstion. heeoidingly, this phase ol'the test return lotuses on the bssie ineome concepts. 1. Bill's 'WJ is prm'id-ed {Exhibit A: 1 J. The 1015 W-I includes his salary (593,001)}, bonus {EolJlll}. and ineotne from group-term lili: insutsltoe coverage in esoess at ssonoo miss-ts}, end is redueed by his 3? percent L'nl'rilJ-utim'l. {sense} is USE's qualied pension plan. The company mat-:hes Bill's contribution to the on. 2. ghe Sehmppoul's receive n'rn lW-l HTs liar interest {Exhibits Alt-2 and sit-3 ]I, hm 1099-13le for dividends {Esiu'isits sit-tr onel iii-5]. and n eornbineel interest and dividend statement [Exhibit me}. a. .1 3. lore: and her brother, Bob. are eo-ouaters of. and aetive partieipants in, a amintre- restoration business. onee owns 31] parent, and Bob earns ft] percent of the business- The business was thinned as an S eorpotatioo in 200?. During 2M5. the eompam' pays SEM in dh'ldends. The basis oFonee's saxitis 533,000. W i-lut'lrp l..- AII has. Iii-nil Into. u-II-rwq-rL-iI. n horde-I.- an n IfI'l In trill-uh mini- Il mmqhwhh\" *MH Gapy'ntj'l'ls'i Ilium Ht-H'h III-laud hula-h H gun-u has.\" skillet-Huh\" m E-u-y \"mi-alienated .Iul ante-u newline IiiHutu Wuhanoi Aaard'ntl. sea 4. The Schnappaufs receive a EDI-4 federal income tax refund of .593? on Mat}- 12, 2015. De iii-Ia].r 15, 2015, they reeeit'e their intense eat: remd From the state of Rmide Island. In Ianuar-y into, the state until: the Sehnappaurs a Fon'n ID'EI'EI-E [Exhibit tit-F}. Their total itemiatod dedttetiot'ls in HIM- were $2|}JI|5I . 5. During Elill.1 loyce is the luck}.r ninety-third caller to a haul radio station and win: 5500 in cash and :- Tablet. Despite repeated calls to the radio station. she has not reeeh'ed a Form ICEDMISC. J11. asutouneing the prize, the radio station hoot said that the mamIFaeturer's suggested retail price ne the Tablet is rm. Hour- et'er. lore: has a eatalog 'om Supersonie Eleetrosties that advertises the Tablet for 5595. 6. The Sehnappaufs reeeitre a Form WJG {Exhibit tit-3} For their Winnings at the Yardley Cash-to in Conneeljeut. 1 Dr: [one 161 EDIE, Bill receives a check {hr $15,430 'om the United Insurance Cot-pumion. Though he was anon-ale he'it.r he was the designated haneeiary of an irmtrance policy.' on the Lite of' his uncle. The Policy has! a tnatl.n:'it'_|.r value of $15,]. and the letter ow the eompanj.r stated that his tmele had paid premiums on the policy.r tatSBJSID {Exhibit J's-'9']- . loyee is aetiue in the sehool I'T'D. During the year. she receives an award at out- smtd'utg service to the organization. She reeeives a plaque and two 5125 gift eer- eieates that were donated to the FTC! h}.- ioeal merei'atnts. '5". To eomplete phase I, you will need Form Ind-t]. Sehedule B, and Sehodule D. PHASE lI-CHAP'I'EIIE 5-5 This is the seeenci phase eF the te:t tenIIn prehlem Ire-u began at the end efhapter 1r. Th' phase uf the tax return ineurputatc: the maten'el 'IJm I: hepters 5 15 TI", and B be [well-riding yen with infennetien eeneeming the Sehnsppeu' Iietiuetiem I'er ll 'l'hei.I preside gene with the renewing inmnine-n l. IIJ-yee mites children's bunks II a Tariff}? IJf publishers. 5111: has been sell- empleyeei sine: EMT. I'Is e. 'eelerbee writen lei'ee incurs ee-sts eseeeiatecl with pre- paring a manuscript list which she dues net yet have : mntrect. During the year, Inge: makes 4 business trim. eeeh 5 days lung, In meet smith veries publishers. Fer shelter trips that ere elerser te heme, she either drives at tnltes the train and retutns the same day. n December HI, 11115, Inga.- receives an advance [see helewjl en her next beret. Under the eemreet. Ieyee is sehctiuieei [D- hegin writ cm the bun-nit em Fehmat'y 1, 21115, and Must have it mmpletecl by Nurember 5D, 21.'l'he Sehmmui's' heme has 2 telephenes. leg-gee has a separate phene num- ber fer her business. The inl'e-rnistien em Ieyce's llllilni' is listed better. wt'hhmmhhnlnm-nhr hhmhHHmnwhwhhk-n- CUE): Mann-I hull-me nun-Hm I-I-u-m-II nummmawmew-mMuuss ir-i-I-II-u spanner-Ia lpp-mtll: A. Ewelties {Exhibits Iii-IO te Iii-ll} Publisher's advance semi: iee supplies I?\" '1' rain tickets 535 Airline {4 trips]- lf Ledging {ll nights] 2,240 Heels {11 days) ll] Telephtrne {$23 IInIeI'IthII.r fee per phnne line] It??? IntenIet prewider 5?\" Cell phnne, ineluding bmine eel]: 91.3 Business-related ptntsgc B? Pntingfenring [+52 Legal Fees 2,000 Interest rm autn 15-1 1. 3. I5. n January 2. .2015, Jesse purchases a net'sr ear tn use in her business. The eat. a Velster, casts 31 530D. Ieyce pays 52,213] in trash and nances the balance thmugh the dealer. She uses the car 45 percent uf'te time at business and elrit' a tetal ei' [0500 miles during 2015. The rental expenses fer the l miles elrit'el't ant: repairs and maintenance.r SEED; insurance, 591i]; and gasrtline, 513%. The eerreetdepreeianen expense Fer ZINE is 54534 [315.1% 3-: 4591i I Ni}. leyce's efee is Incated in a separate rcrcrm in the Items-e and ucmpies 3H scluare Feet. The tets square Eiserage erfthe hearse is seen- The Sel'lnappau purchased the heme cut Jul}.F i", Ill-Ell, hr MIME. The leca] practice is ten allecate ll] percent ctfl'he purchase price ttsland. The depree'estiem percentage For the rather: is [Hi-15454. When lesee started. her busine cnt January.r l. IMF. the Fair market 1nilne e-fthe huuse was 51mm.The tats] huusehultl expenses liar EDIE are as allun's: Heat 51 . I 3\"} Insurance 1.41311 Elcem'city F40 Repairs tn kitchen 3.l1'.]|] Cleaning 1,560 . Bill began work an his MBA at Dem-ill: University. He enmlletl :in use courses, and paid 5331\""?! in tuit'ien and 53m I'er heels. . Bill and lessee each centribute the ntasirnum te their respective libs. aeccrunts in 2m 5- The IRA aeeeunt is Ins'ee's enls retirement vehicle. Eill's basis in his 1M befare the current year's cenlbutien is Simll, and legrce's basis is 53mm. The Fair marlcet 1ralue uf'EilI's \"M. an [Eflfl is $41,?30, and the Fair market value efluy'ee's [IL-1 is 553,100. In additien. Bill and lettuce contributed 52,000 tr: a Cut'erdell Esluealinrl Savings Aeeeunt ar Thomas- Dn lune l5. M15. the Sehnappauii' 30H sentient wag-en 'is totaled in Hurricane Ann. The cat was purchased liar 523,111") in Net-ember EDIE. The Sclmamsauis receive a check fer 52] Jill! Ii'crm zippy [nsuranee Ctlu'npnarn.I that represents the fair market value ef the car minus 1 SEE deductible. [in lune 2e, lIE, they replace the ear with a EDI 5 statics" wag-nu- The new eat costs 53] ,d-l], and the Schnappaufs receive a rebate cheek lines the car's manqu-cturer fur 51,500. 'I"I I. I I f.l. i".I...... r! I. J . i'.I'I ..I 5'. The Eajm'um aloo- domogcs pm of the 5.:thst honor. A m: on; and makcs a. had: in tho rainfall-ow 1hr kitchcn. Ware: dawns-:5 tho kitchcn. causing III: new dishwashm' in short DUI, and :it has II: but: replaced. In addition, the limo; lrum our has to b: rcploood.111c cost ofxh'ng tho hob: in tho mf'is SSJJOEI. Tho Ethiopia-211.1% rem-ire 51,501] {SEMI} rep-air cos: minus S doductiblcj to x the roo Infommion cumming tho dishmshcr and tho oor is as follows: Data: Original PM? FM? Pram Acquired. Cm: mm Afro: Edmbummont bio-hum: Sfafl S 344:! 5 H0 5-0- 1533!} Fluor 33115315 51,300 51,550 s-o- 535:} Kim-ml H'rI LII-All huh: Inn-d Hr. Finn-u. nI. H'm- in -| urn-I. Inn Ira-inh mn hi mmmhmhh nun-Mn: CMFQ'IEH I'- m urin- Iululqul Hug \"in\" hum nil-mu.\" I'll-H.9- D\" mmhllnw null-HI mung-liq maltyu Wuhan-\"i. Wm A5 3. The Schnappaul's incur th: f'ullnrw'mg muodical cxpcmrs {bczirc mnsiclcring tho smo reimbursement {hay roroirc From their health ins-mourn: polirg'}: Medical premiums $3,311\"! Doom-rs Lana Chiropractor 65!} Dcnl'isr 1.9M Vol: x: {55.111119 do; Suid 35H Pruscpl'iun drugs 34- [Jrcrihr-cou not: drugs (aspirin, oough syrup} \"'5 In addition, Bill purcham an Emnlignor machin: for WW. 111a: machin: m rommmcndcd by thc chiropractor In hclp strengthen BiH's back muscles. 9. '11:: Schnappou pay that: following pmpcrw torts: Wakccld house 5] LIED IE":In'JiI:|.r cor Hand 11}; Bill {ad volumm} 430 Joyce's our {ad I'illltl'} 52!} 5'. The Eajm'um aloo- domogcs pm of the 5.:thst honor. A m: on; and makcs a. had: in tho rainfall-ow 1hr kitchcn. Ware: dawns-:5 tho kitchcn. causing III: new dishwashm' in short DUI, and :it has II: but: replaced. In addition, the limo; lrum our has to b: rcploood.111c cost ofxh'ng tho hob: in tho mf'is SSJJOEI. Tho Ethiopia-211.1% rem-ire 51,501] {SEMI} rep-air cos: minus S doductiblcj to x the roo Infommion cumming tho dishmshcr and tho oor is as follows: Data: Original PM? FM? Pram Acquired. Cm: mm Afro: Edmbummont bio-hum: Sfafl S 344:! 5 H0 5-0- 1533!} Fluor 33115315 51,300 51,550 s-o- 535:} Kim-ml H'rI LII-All huh: Inn-d Hr. Finn-u. nI. H'm- in -| urn-I. Inn Ira-inh mn hi mmmhmhh nun-Mn: CMFQ'IEH I'- m urin- Iululqul Hug \"in\" hum nil-mu.\" I'll-H.9- D\" mmhllnw null-HI mung-liq maltyu Wuhan-\"i. Wm A5 3. The Schnappaul's incur th: f'ullnrw'mg muodical cxpcmrs {bczirc mnsiclcring tho smo reimbursement {hay roroirc From their health ins-mourn: polirg'}: Medical premiums $3,311\"! Doom-rs Lana Chiropractor 65!} Dcnl'isr 1.9M Vol: x: {55.111119 do; Suid 35H Pruscpl'iun drugs 34- [Jrcrihr-cou not: drugs (aspirin, oough syrup} \"'5 In addition, Bill purcham an Emnlignor machin: for WW. 111a: machin: m rommmcndcd by thc chiropractor In hclp strengthen BiH's back muscles. 9. '11:: Schnappou pay that: following pmpcrw torts: Wakccld house 5] LIED IE":In'JiI:|.r cor Hand 11}; Bill {ad volumm} 430 Joyce's our {ad I'illltl'} 52!} 'I'HE SCHHAPPAUF FAMILY [It 21115., Bill and just: Sehnoppnuflire in Wakeeld, [LL Bill is 531 :Ind Inst-re is El. Bill is :1 disttiet ssies manager or USE? Equipment lHorn-oral:titIIn. a ltode island rm that menutitetures and distributes gaming equipment. Jozree is a self-employed author of tiiildren's books. The Schnapps-\"1's have three ehiielren1 Will, 2] . Dan. 19. and Tom. \"5. [n Fhfl' 20115, the Sehnspp-auts provide the Following bssie intbtntstion for proper ing their ll federal income to: return: 1. The ehnopmuf's use the est-h method of stemming and ii]: their return on n eslendshyesr basis. 1. Unless ntherwise stated, assume that the Sehnnppsul's wont to minimise the cur- tent year's to: liability. That is. they 1would lilte to desr ineonte when possible and take the largest deduetitms possible, a pnerim titey hot-e JlJmtred in the post. 3. legree's Seeisl Security number is 3?] "1-1-5201 4. Hill's Social Security number is 150-52-54o. 5. 1It'li'ill's Soeisl Seeurity number is 3?: rid-It's] ] . IS. Don's Soeinl Beauty number is 3??-42-3I1-1L 'F. Tom's Soeisl Seettritr number is STE-d'EI-ol l. E. The Seltnnppsul's do: not have any foreign bank seemlnts tJr fureign trusts- 9'. Their address is 2? Horthnp Street. Wakeeiel. li..l. {\"23\"}. II]. The Seltnsppeufs do not wish to euntribute to the presidential eleetion esmpaign. PHASE ICHAPTERE 1-4 The rst phase ofthe on: return problem is designed. to introdnee you to some of the too: fttrtns and the suppnrting dueurnentsliem anrrns W-l, H'.l".il"5laII'~iT1 etc.) needed to: tame plot: :1 bnsie to: return. The rst lions ehopten tinens on the ineottte ospeets ot'indisitlttol tssstion. heeoidingly, this phase ol'the test return lotuses on the bssie ineome concepts. 1. Bill's 'WJ is prm'id-ed {Exhibit A: 1 J. The 1015 W-I includes his salary (593,001)}, bonus {EolJlll}. and ineotne from group-term lili: insutsltoe coverage in esoess at ssonoo miss-ts}, end is redueed by his 3? percent L'nl'rilJ-utim'l. {sense} is USE's qualied pension plan. The company mat-:hes Bill's contribution to the on. 2. ghe Sehmppoul's receive n'rn lW-l HTs liar interest {Exhibits Alt-2 and sit-3 ]I, hm 1099-13le for dividends {Esiu'isits sit-tr onel iii-5]. and n eornbineel interest and dividend statement [Exhibit me}. a. .1 3. lore: and her brother, Bob. are eo-ouaters of. and aetive partieipants in, a amintre- restoration business. onee owns 31] parent, and Bob earns ft] percent of the business- The business was thinned as an S eorpotatioo in 200?. During 2M5. the eompam' pays SEM in dh'ldends. The basis oFonee's saxitis 533,000. W i-lut'lrp l..- AII has. Iii-nil Into. u-II-rwq-rL-iI. n horde-I.- an n IfI'l In trill-uh mini- Il mmqhwhh\" *MH Gapy'ntj'l'ls'i Ilium Ht-H'h III-laud hula-h H gun-u has.\" skillet-Huh\" m E-u-y \"mi-alienated .Iul ante-u newline IiiHutu Wuhanoi Aaard'ntl. sea 4. The Schnappaufs receive a EDI-4 federal income tax refund of .593? on Mat}- 12, 2015. De iii-Ia].r 15, 2015, they reeeit'e their intense eat: remd From the state of Rmide Island. In Ianuar-y into, the state until: the Sehnappaurs a Fon'n ID'EI'EI-E [Exhibit tit-F}. Their total itemiatod dedttetiot'ls in HIM- were $2|}JI|5I . 5. During Elill.1 loyce is the luck}.r ninety-third caller to a haul radio station and win: 5500 in cash and :- Tablet. Despite repeated calls to the radio station. she has not reeeh'ed a Form ICEDMISC. J11. asutouneing the prize, the radio station hoot said that the mamIFaeturer's suggested retail price ne the Tablet is rm. Hour- et'er. lore: has a eatalog 'om Supersonie Eleetrosties that advertises the Tablet for 5595. 6. The Sehnappaufs reeeitre a Form WJG {Exhibit tit-3} For their Winnings at the Yardley Cash-to in Conneeljeut. 1 Dr: [one 161 EDIE, Bill receives a check {hr $15,430 'om the United Insurance Cot-pumion. Though he was anon-ale he'it.r he was the designated haneeiary of an irmtrance policy.' on the Lite of' his uncle. The Policy has! a tnatl.n:'it'_|.r value of $15,]. and the letter ow the eompanj.r stated that his tmele had paid premiums on the policy.r tatSBJSID {Exhibit J's-'9']- . loyee is aetiue in the sehool I'T'D. During the year. she receives an award at out- smtd'utg service to the organization. She reeeives a plaque and two 5125 gift eer- eieates that were donated to the FTC! h}.- ioeal merei'atnts. '5". To eomplete phase I, you will need Form Ind-t]. Sehedule B, and Sehodule D. Form 1040 2016 (99) Department of the TreasuryInternal Revenue Service U.S. Individual Income Tax Return OMB No. 1545-0074 , 2016, ending IRS Use OnlyDo not write or staple in this space. See separate instructions. For the year Jan. 1-Dec. 31, 2016, or other tax year beginning Your first name and initial Last name , 20 Your social security number If a joint return, spouse's first name and initial Last name Spouse's social security number Apt. no. Home address (number and street). If you have a P.O. box, see instructions. c City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Foreign country name Filing Status Check only one box. Exemptions Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking Foreign postal code a box below will not change your tax or refund. You Spouse Foreign province/state/county 1 2 3 4 Single Married filing jointly (even if only one had income) c child's name here. a 5 Qualifying widow(er) with dependent child Yourself. If someone can claim you as a dependent, do not check box 6a . Spouse . Dependents: (1) First name Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this Married filing separately. Enter spouse's SSN above and full name here. a 6a b . . . . . . . . . . . (2) Dependent's social security number Last name . . . . . . . . . . . . . . . . } (4) \u0014 if child under age 17 qualifying for child tax credit (see instructions) (3) Dependent's relationship to you Dependents on 6c not entered above d Attach Form(s) W-2 here. Also attach Forms W-2G and 1099-R if tax was withheld. If you did not get a W-2, see instructions. Adjusted Gross Income Boxes checked on 6a and 6b No. of children on 6c who: lived with you did not live with you due to divorce or separation (see instructions) If more than four dependents, see instructions and check here a Income Make sure the SSN(s) above and on line 6c are correct. Total number of exemptions claimed . . . . . . . . . . . . . . . . . . . . . . . 7 . 8b . . . . . . . . . 8a . . . . . . . 9a 10 11 Qualified dividends . . . . . . . . . . . 9b Taxable refunds, credits, or offsets of state and local income taxes Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11 12 13 14 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . Capital gain or (loss). Attach Schedule D if required. If not required, check here a Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . . . 12 13 14 15a 16a 17 IRA distributions . 15a b Taxable amount . . . Pensions and annuities 16a b Taxable amount . . . Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 15b 16b 17 18 19 20a Farm income or (loss). Attach Schedule F . Unemployment compensation . . . . Social security benefits 20a 18 19 20b 21 22 Other income. List type and amount Combine the amounts in the far right column for lines 7 through 21. This is your total income 23 Educator expenses 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ 25 Health savings account deduction. Attach Form 8889 . 24 25 26 27 28 Moving expenses. Attach Form 3903 . . . . . . Deductible part of self-employment tax. Attach Schedule SE . Self-employed SEP, SIMPLE, and qualified plans . . 26 27 28 29 30 31a Self-employed health insurance deduction Penalty on early withdrawal of savings . . . . . . . . . . 32 33 34 Alimony paid b Recipient's SSN a IRA deduction . . . . . . . Student loan interest deduction . . Tuition and fees. Attach Form 8917 . 29 30 31a . . . . . . . . . . . . 32 33 34 35 36 37 Domestic production activities deduction. Attach Form 8903 35 Add lines 23 through 35 . . . . . . . . . . . . . Subtract line 36 from line 22. This is your adjusted gross income 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . 8a b 9a Taxable interest. Attach Schedule B if required . Tax-exempt interest. Do not include on line 8a . Ordinary dividends. Attach Schedule B if required . . . . . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Taxable amount . . . . . . . . . . a . . Add numbers on lines above a 21 22 23 . . For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. . . . . . . . . . a 36 37 Cat. No. 11320B Form 1040 (2016) Page 2 Form 1040 (2016) 38 Amount from line 37 (adjusted gross income) Tax and Credits 39a Check if: Standard Deduction for People who check any box on line 39a or 39b or who can be claimed as a dependent, see instructions. All others: Single or Married filing separately, $6,300 Married filing jointly or Qualifying widow(er), $12,600 Head of household, $9,300 . . Other Taxes 58 59 60a Unreported social security and Medicare tax from Form: a b 61 First-time homebuyer credit repayment. Attach Form 5405 if required 62 63 Form 8960 c Taxes from: a Form 8959 b Add lines 56 through 62. This is your total tax . . Payments If you have a qualifying child, attach Schedule EIC. . . You were born before January 2, 1952, Spouse was born before January 2, 1952, . . Blind. Blind. . } . . . . . 38 . Total boxes checked a 39a 39b Itemized deductions (from Schedule A) or your standard deduction (see left margin) Subtract line 40 from line 38 . . . . . . . . . . . . . . . . . . . 42 43 Exemptions. If line 38 is $155,650 or less, multiply $4,050 by the number on line 6d. Otherwise, see instructions Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . Form 4972 c Tax (see instructions). Check if any from: a Form(s) 8814 b 44 45 46 47 48 49 50 51 52 53 54 55 56 57 64 65 66a b 67 68 69 70 71 72 75 76a Alternative minimum tax (see instructions). Attach Form 6251 . Excess advance premium tax credit repayment. Attach Form 8962 . . . . . . . . . . . . . . . 48 . . . . . . 52 Residential energy credits. Attach Form 5695 . . . . 53 3800 b 8801 c Other credits from Form: a 54 Add lines 48 through 54. These are your total credits . . . . . Subtract line 55 from line 47. If line 55 is more than line 47, enter -0- . . . . . . . . . . . . Self-employment tax. Attach Schedule SE . . . . Add lines 44, 45, and 46 . . . . . . . Foreign tax credit. Attach Form 1116 if required . . . . . . . . . . a . . . . Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required . . . . . . . . . . . Instructions; enter code(s) . . . . . . . . . . 64 Federal income tax withheld from Forms W-2 and 1099 . . 2016 estimated tax payments and amount applied from 2015 return 65 Earned income credit (EIC) . . . . . . . . . . 66a . . . . . b 4137 . . . . . . . . . . . . . 67 American opportunity credit from Form 8863, line 8 . Net premium tax credit. Attach Form 8962 . . . . Amount paid with request for extension to file . . . . . . . . . 68 69 70 . 71 72 Credits from Form: a 2439 b Reserved c 8885 d 73 Add lines 64, 65, 66a, and 67 through 73. These are your total payments . Excess social security and tier 1 RRTA tax withheld Credit for federal tax on fuels. Attach Form 4136 . . Full-year coverage Health care: individual responsibility (see instructions) Nontaxable combat pay election 66b Additional child tax credit. Attach Schedule 8812 . . . a . . . . 8919 Household employment taxes from Schedule H . . . . . . . . . 40 41 42 43 44 45 46 47 49 50 51 Credit for child and dependent care expenses. Attach Form 2441 Education credits from Form 8863, line 19 . . . . . Retirement savings contributions credit. Attach Form 8880 Child tax credit. Attach Schedule 8812, if required . . . . . . 55 56 57 58 59 60a 60b 61 62 . a 63 . a 74 . . . . . If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid 75 Amount of line 75 you want refunded to you. If Form 8888 is attached, check here 76a . a a c Type: Routing number Checking Savings Account number Amount of line 75 you want applied to your 2017 estimated tax a 77 77 78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions a 78 79 Estimated tax penalty (see instructions) . . . . . . . 79 Do you want to allow another person to discuss this return with the IRS (see instructions)? Yes. Complete below. a\u0001 Third Party Designee . 40 41 Direct deposit? See a instructions. Amount You Owe . If your spouse itemizes on a separate return or you were a dual-status alien, check here a b 73 74 Refund { . b d No Personal identification a number (PIN) Phone no. a Designee's name a Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Joint return? See instructions. Keep a copy for your records. F Paid Preparer Use Only Your signature Date Your occupation Daytime phone number Spouse's signature. If a joint return, both must sign. Date Spouse's occupation If the IRS sent you an Identity Protection PIN, enter it here (see inst.) PTIN Check if self-employed Print/Type preparer's name Firm's name Preparer's signature Date a Firm's EIN Firm's address a Phone no. www.irs.gov/form1040 a Form 1040 (2016) SCHEDULE A (Form 1040) OMB No. 1545-0074 Itemized Deductions Department of the Treasury Internal Revenue Service (99) a Information about Schedule A and its separate instructions is at www.irs.gov/schedulea. a Attach to Form 1040. Name(s) shown on Form 1040 Medical and Dental Expenses Taxes You Paid Interest You Paid Note: Your mortgage interest deduction may be limited (see instructions). Caution: Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) . . . . . 1 2 Enter amount from Form 1040, line 38 2 3 Multiply line 2 by 10% (0.10). But if either you or your spouse was born before January 2, 1952, multiply line 2 by 7.5% (0.075) instead 3 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . 5 State and local (check only one box): a Income taxes, or . . . . . . . . . . . 5 b General sales taxes 6 Real estate taxes (see instructions) . . . . . . . . . 6 7 Personal property taxes . . . . . . . . . . . . . 7 8 Other taxes. List type and amount a 8 9 Add lines 5 through 8 . . . . . . . . . . . . . . . . 10 Home mortgage interest and points reported to you on Form 1098 10 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address a . . . . . . 4 . . . . . . 9 . . . . . . 15 . . . . . . 19 . . . . . . 20 . . . . . 27 } 11 12 Points not reported to you on Form 1098. See instructions for special rules . . . . . . . . . . . . . . . . . 12 13 Mortgage insurance premiums (see instructions) . . . . . 13 14 Investment interest. Attach Form 4952 if required. (See instructions.) 14 15 Add lines 10 through 14 . . . . . . . . . . . . . . . Gifts to 16 Gifts by cash or check. If you made any gift of $250 or more, see instructions . . . . . . . . . . . . . . . . 16 Charity 17 Other than by cash or check. If any gift of $250 or more, see If you made a gift and got a instructions. You must attach Form 8283 if over $500 . . . 17 benefit for it, 18 Carryover from prior year . . . . . . . . . . . . 18 see instructions. 19 Add lines 16 through 18 . . . . . . . . . . . . . . . Casualty and Theft Losses 2016 Attachment Sequence No. 07 Your social security number 20 Casualty or theft loss(es). Attach Form 4684. (See instructions.) . . Job Expenses 21 Unreimbursed employee expensesjob travel, union dues, and Certain job education, etc. Attach Form 2106 or 2106-EZ if required. Miscellaneous 21 (See instructions.) a Deductions 22 Tax preparation fees . . . . . . . . . . . . . 22 23 Other expensesinvestment, safe deposit box, etc. List type and amount a Other Miscellaneous Deductions 24 25 26 27 28 23 Add lines 21 through 23 . . . . . . . . . . . . 24 Enter amount from Form 1040, line 38 25 Multiply line 25 by 2% (0.02) . . . . . . . . . . 26 Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . Otherfrom list in instructions. List type and amount a 28 29 Is Form 1040, line 38, over $155,650? Total Itemized No. Your deduction is not limited. Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1040, line 40. Deductions } . Yes. Your deduction may be limited. See the Itemized Deductions Worksheet in the instructions to figure the amount to enter. 30 If you elect to itemize deductions even though they are less than your standard deduction, check here . . . . . . . . . . . . . . . . . . . a For Paperwork Reduction Act Notice, see Form 1040 instructions. Cat. No. 17145C . 29 Schedule A (Form 1040) 2016 SCHEDULE C (Form 1040) Profit or Loss From Business OMB No. 1545-0074 2016 (Sole Proprietorship) about Schedule C and its separate instructions is at www.irs.gov/schedulec. a Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065. a Information Department of the Treasury Internal Revenue Service (99) Attachment Sequence No. 09 Name of proprietor Social security number (SSN) A B Enter code from instructions Principal business or profession, including product or service (see instructions) a C Business name. If no separate business name, leave blank. E Business address (including suite or room no.) F G H City, town or post office, state, and ZIP code Cash (2) Accrual (3) Other (specify) a Accounting method: (1) Did you \"materially participate\" in the operation of this business during 2016? If \"No,\" see instructions for limit on losses If you started or acquired this business during 2016, check here . . . . . . . . . . . . . . . . . I J Did you make any payments in 2016 that would require you to file Form(s) 1099? (see instructions) . If "Yes," did you or will you file required Forms 1099? . . . . . . . . . . . . . . Part I D Employer ID number (EIN), (see instr.) a Income . . . . . . . . 2 3 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the \"Statutory employee\" box on that form was checked . . . . . . . . . a Returns and allowances . . . . . . . . . . . . . . . . . . . . . . . . . Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . 4 5 6 Cost of goods sold (from line 42) . . . . . . . . . . . . . . . . . . . Gross profit. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) . . . . . . . . . . 4 5 6 7 Gross income. Add lines 5 and 6 . . . a 7 8 Advertising . 9 Car and truck expenses (see instructions) . . . . . Commissions and fees . 1 Part II 10 11 12 13 . . . . Contract labor (see instructions) Depletion . . . . . Depreciation and section 179 expense deduction (not included in Part III) (see instructions) . . . . . 14 Employee benefit programs (other than on line 19) . . Insurance (other than health) 15 16 . . . . . . . . . . . . . . . . Expenses. Enter expenses for business use of your home only on line 30. 8 9 10 Office expense (see instructions) 18 Pension and profit-sharing plans . Rent or lease (see instructions): Vehicles, machinery, and equipment 19 20a Other business property . . . Repairs and maintenance . . . Supplies (not included in Part III) . 20b 21 22 Taxes and licenses . . . . . Travel, meals, and entertainment: Travel . . . . . . . . . 23 24a 25 Deductible meals and entertainment (see instructions) . Utilities . . . . . . . . 24b 25 26 27a b Wages (less employment credits) . Other expenses (from line 48) . . Reserved for future use . . . 26 27a 27b 21 22 23 24 a 14 15 b 17 Interest: Mortgage (paid to banks, etc.) Other . . . . . . Legal and professional services 28 Total expenses before expenses for business use of home. Add lines 8 through 27a . . . . . . a 28 29 30 Tentative profit or (loss). Subtract line 28 from line 7 . . . . . . . 29 a b 16a 16b 17 . . . . . . . . . . . . Use the Simplified . . . . . . . Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Form 1040, line 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. 32 Yes Yes No No a . . Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Method Worksheet in the instructions to figure the amount to enter on line 30 31 . No 2 3 19 20 b 13 . . . Yes 1 18 a 11 12 . . . . If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Form 1040, line 12, (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P } } 30 31 32a 32b All investment is at risk. Some investment is not at risk. Schedule C (Form 1040) 2016 Page 2 Schedule C (Form 1040) 2016 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If \"Yes,\" attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . a b Cost c Lower of cost or market Other (attach explanation) 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation . . . 35 36 Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . 36 37 Cost of labor. Do not include any amounts paid to yourself . . . . . . . . . . . . . . 37 38 Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . 38 39 Other costs . . . . . . . . . . . . . . . . . . . . . . . . . 39 40 Add lines 35 through 39 . . . . . . . . . . . . . . . . . . . . . . . . 40 41 Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . 41 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 . . . . . . 42 Part IV . . . Yes . Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. / / 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 Of the total number of miles you drove your vehicle during 2016, enter the number of miles you used your vehicle for: a No a b Commuting (see instructions) Business c Other Yes No 45 Was your vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . 46 Do you (or your spouse) have another vehicle available for personal use?. . . . . . . . . . . . . . Yes No 47a Do you have evidence to support your deduction? . . . . . . . . . . . . . . . . . . . . Yes No If \"Yes,\" is the evidence written? . . . . . . . . . . . . . . . . . . . . Yes No b Part V 48 . . . . . . Other Expenses. List below business expenses not included on lines 8-26 or line 30. Total other expenses. Enter here and on line 27a . . . . . . . . . . . . . . . . 48 Schedule C (Form 1040) 2016 Form 4562 Depreciation and Amortization a Attach a Information to your tax return. about Form 4562 and its separate instructions is at www.irs.gov/form4562. Name(s) shown on return 1 2 3 4 5 Attachment Sequence No. 179 Identifying number Business or activity to which this form relates Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . Total cost of section 179 property placed in service (see instructions) . . . . . . Threshold cost of section 179 property before reduction in limitation (see instructions) . Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If separately, see instructions . . . . . . . . . . . . . . . . . . . . 6 2016 (Including Information on Listed Property) Department of the Treasury Internal Revenue Service (99) Part I OMB No. 1545-0172 (a) Description of property (b) Cost (business use only) . . . . . . . . . . . . married . . . . . . . . . . . filing . . 1 2 3 4 5 (c) Elected cost 7 Listed property. Enter the amount from line 29 . . . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . . . . . . 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . 9 10 Carryover of disallowed deduction from line 13 of your 2015 Form 4562 . . . . . . . . . . . 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) 11 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 . . . . . . 12 13 13 Carryover of disallowed deduction to 2017. Add lines 9 and 10, less line 12 a Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property.) (See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) . . . . . . . . . . . . . . . . . . . . . . 14 15 Property subject to section 168(f)(1) election . . . . . . . . . . . . . . . . . . . . 15 16 Other depreciation (including ACRS) . . . . . . . . . . . . . . . . . . . . . . 16 Part III MACRS Depreciation (Don't include listed property.) (See instructions.) Section A 17 17 MACRS deductions for assets placed in service in tax years beginning before 2016 . . . . . . . 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here . . . . . . . . . . . . . . . . . . . . . . a Section BAssets Placed in Service During 2016 Tax Year Using the General Depreciation System (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (business/investment use onlysee instructions) (d) Recovery period (e) Convention (f) Method (g) Depreciation deduction 19a b c d e f g h 3-year property 5-year property 7-year property 10-year property 15-year property 20-year property 25-year property Residential rental property i Nonresidential real property Section CAssets Placed in Service During 2016 Tax Year Using the Alternative Depreciation System 20a Class life b 12-year c 40-year Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 . . . . . . . . . . . . . . . . . . . . 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporationssee instructions . 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N 21 22 Form 4562 (2016) Page 2 Listed Property (Include automobiles, certain other vehicles, certain aircraft, certain computers, and property used for entertainment, recreation, or amusement.) Form 4562 (2016) Part V Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section ADepreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? 24b If \"Yes,\" is the evidence written? Yes No Yes (c) (a) (b) Business/ (d) Type of property (list Date placed investment use Cost or other basis vehicles first) in service percentage (e) Basis for depreciation (business/investment use only) (f) Recovery period (g) Method/ Convention (h) Depreciation deduction No (i) Elected section 179 cost 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . 25 26 Property used more than 50% in a qualified business use: % % % 27 Property used 50% or less in a qualified business use: S/L - % S/L - % S/L - % 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 . . . . . . . . . . . . 29 Section BInformation on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other \"more than 5% owner,\" or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) Vehicle 1 30 Total business/investment miles driven during the year (don't include commuting miles) . 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven . . . . . . . . . 33 Total miles driven during the year. Add lines 30 through 32 . . . . . . . 34 Was the vehicle available for personal use during off-duty hours? . . . . . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . Yes No (b) Vehicle 2 Yes No (c) Vehicle 3 Yes (d) Vehicle 4 No Yes No (e) Vehicle 5 Yes (f) Vehicle 6 No Yes No 36 Is another vehicle available for personal use? Section CQuestions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons (see instructions). No 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners . . 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions.) . Note: If your answer to 37, 38, 39, 40, or 41 is \"Yes,\" don't complete Section B for the covered vehicles. . . Part VI Amortization (a) Description of costs (b) Date amortization begins (c) Amortizable amount (e) Amortization period or percentage (d) Code section (f) Amortization for this year 42 Amortization of costs that begins during your 2016 tax year (see instructions): 43 Amortization of costs that began before your 2016 tax year . . . . . . 44 Total. Add amounts in column (f). See the instructions for where to report . . . . . . . . . . . . . . . 43 44 Form 4562 (2016) Form 4684 Department of the Treasury Internal Revenue Service Name(s) shown on tax return Casualties and Thefts a OMB No. 1545-0177 2016 Information about Form 4684 and its separate instructions is at www.irs.gov/form4684. a Attach to your tax return. a Use a separate Form 4684 for each casualty or theft. Attachment Sequence No. 26 Identifying number SECTION APersonal Use Property (Use this section to report casualties and thefts of property not used in a trade or business or for income-producing purposes.) 1 Description of properties (show type, location, and date acquired for each property). Use a separate line for each property lost or damaged from the same casualty or theft. Property A Property B Property C Property D Properties A 2 Cost or other basis of each property . . . . . . 3 Insurance or other reimbursement (whether or not you filed a claim) (see instructions) . . . . . . . . Note: If line 2 is more than line 3, skip line 4. 4 Gain from casualty or theft. If line 3 is more than line 2, enter the difference here and skip lines 5 through 9 for that column. See instructions if line 3 includes insurance or other reimbursement you did not claim, or you received payment for your loss in a later tax year . . 5 Fair market value before casualty or theft . . . . 6 Fair market value after casualty or theft . . . . . 7 Subtract line 6 from line 5 . . . . . . . . . 8 Enter the smaller of line 2 or line 7 . . . . . . 9 Subtract line 3 from line 8. If zero or less, enter -0- . . B C D 2 3 4 5 6 7 8 9 10 Casualty or theft loss. Add the amounts on line 9 in columns A through D . 11 Enter the smaller of line 10 or $100 . . . . . . . . . . . . 12 Subtract line 11 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11 12 Caution: Use only one Form 4684 for lines 13 through 18. 13 Add the amounts on line 12 of all Forms 4684 . . . . 14 Add the amounts on line 4 of all Forms 4684. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 14 . . . . . . . . . . . . . . . . . . . . . . . 15 If line 14 is more than line 13, enter the difference here and on Schedule D. Do not complete the rest of this section (see instructions). If line 14 is less than line 13, enter -0- here and go to line 16. If line 14 is equal to line 13, enter -0- here. Do not complete the rest of this section. 16 If line 14 is less than line 13, enter the difference . . . . . . . . . . . } 15 . 16 17 Enter 10% of your adjusted gross income from Form 1040, line 38, or Form 1040NR, line 37. Estates and trusts, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Subtract line 17 from line 16. If zero or less, enter -0-. Also enter the result on Schedule A (Form 1040), line 20, or Form 1040NR, Schedule A, line 6. Estates and trusts, enter the result on the \"Other deductions\" line of your tax return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 For Paperwork Reduction Act Notice, see instructions. . . Cat. No. 12997O Form 4684 (2016) Page 2 Attachment Sequence No. 26 Form 4684 (2016) Identifying number Name(s) shown on tax return. Do not enter name and identifying number if shown on other side. SECTION BBusiness and Income-Producing Property Casualty or Theft Gain or Loss (Use a separate Part l for each casualty or theft.) Part I 19 Description of properties (show type, location, and date acquired for each property). Use a separate line for each property lost or damaged from the same casualty or theft. See instructions if claiming a loss due to a Ponzi-type investment scheme and Section C is not completed. Property A Property B Property C Property D Properties A 20 Cost or adjusted basis of each property . . . . 21 Insurance or other reimbursement (whether or not you filed a claim). See the instructions for line 3 . . . . 21 Note: If line 20 is more than line 21, skip line 22. Gain from casualty or theft. If line 21 is more than line 20, enter the difference here and on line 29 or line 34, column (c), except as provided in the instructions for line 33. Also, skip lines 23 through 27 for that column. See the instructions for line 4 if line 21 includes insurance or other reimbursement you did not claim, or you received payment for your loss in a later tax year Fair market value before casualty or theft . . . . Fair market value after casualty or theft . . . . . Subtract line 24 from line 23 . . . . . . . . Enter the smaller of line 20 or line 25 . . . . . 22 23 24 25 26 22 23 24 25 26 B C D 20 . Note: If the property was totally destroyed by casualty or lost from theft, enter on line 26 the amount from line 20. 27 Subtract line 21 from line 26. If zero or less, enter -027 28 Casualty or theft loss. Add the amounts on line 27. Enter the total here and on line 29 or line 34 (see instructions) Part II Summary of Gains and Losses (from separate Parts l) 28 (b) Losses from casualties or thefts (a) Identify casualty or theft (c) Gains from casualties or thefts includible in income (ii) Incomeproducing and employee property (i) Trade, business, rental or royalty property Casualty or Theft of Property Held One Year or Less 29 ( ) ( ) 30 Totals. Add the amounts on line 29 ( ( ) ( ) ( ) ) . . . . . . . . . . . . 30 31 Combine line 30, columns (b)(i) and (c). Enter the net gain or (loss) here and on Form 4797, line 14. If Form 4797 is not otherwise required, see instructions . . . . . . . . . . . . . . . . . . . . . . . 31 32 Enter the amount from line 30, column (b)(ii) here. Individuals, enter the amount from income-producing property on Schedule A (Form 1040), line 28, or Form 1040NR, Schedule A, line 14, and enter the amount from property used as an employee on Schedule A (Form 1040), line 23, or Form 1040NR, Schedule A, line 9. Estates and trusts, partnerships, and S corporations, see instructions 32 Casualty or Theft of Property Held More Than One Year 33 Casualty or theft gains from Form 4797, line 32 . . . . . . . . . . . . . . . . . . . . . . . . . ( ) ( 34 ( ) ( 35 Total losses. Add amounts on line 34, columns (b)(i) and (b)(ii) . . . . . 35 ( ) ) ) ( 36 Total gains. Add lines 33 and 34, column (c) . . . . . . . . . . . . . . . . . . . . . . 37 Add amounts on line 35, columns (b)(i) and (b)(ii) . . . . . . . . . . . . . . . . . . . . 38 If the loss on line 37 is more than the gain on line 36: a Combine line 35, column (b)(i) and line 36, and enter the net gain or (loss) here. Partnerships (except electing large partnerships) and S corporations, see the note below. All others, enter this amount on Form 4797, line 14. If Form 4797 is not otherwise required, see instructions . . . . . . . . . . . . . . . . . . . . . b Enter the amount from line 35, column (b)(ii) here. Individuals, enter the amount from income-producing property on Schedule A (Form 1040), line 28, or Form 1040NR, Schedule A, line 14, and enter the amount from property used as an employee on Schedule A (Form 1040), line 23, or Form 1040NR, Schedule A, line 9. Estates and trusts, enter on the \"Other deductions\" line of your tax return. Partnerships (except electing large partnerships) and S corporations, see the note below. Electing large partnerships, enter on Form 1065-B, Part II, line 11 . . . . . . . . . 39 If the loss on line 37 is less than or equal to the gain on line 36, combine lines 36 and 37 and enter here. Partnerships (except electing large partnerships), see the note below. All others, enter this amount on Form 4797, line 3 . . . . Note: Partnerships, enter the amount from line 38a, 38b, or line 39 on Form 1065, Schedule K, line 11. S corporations, enter the amount from line 38a or 38b on Form 1120S, Schedule K, line 10. 33 ) 36 37 38a 38b 39 Form 4684 (2016) Page 3 Form 4684 (2016) Identifying number Name(s) shown on tax return SECTION CTheft Loss Deduction for Ponzi-Type Investment Scheme Using the Procedures in Revenue Procedure 2009-20 (Complete this section in lieu of Appendix A in Revenue Procedure 2009-20. See instructions.) Computation of Deduction Part I 40 . . . . . . 40 41 42 Income reported on your tax returns for tax years prior to the discovery year (see instructions) . . . . . . . . . . . . . . . . . . . 43 44 45 Add lines 40, 41, and 42 46 Enter .95 (95%) if you have no potential third-party recovery. Enter .75 (75%) if you have potential third-party recovery . . . . . . . . . . . . . . . 46 47 48 Multiply line 46 by line 45 . Actual recovery . . . . . . . . . . 47 48 49 50 Potential insurance/Securities Investor Protection Corporation (SIPC) recovery Add lines 48 and 49. This is your total recovery . . . . . . . . . . . . . . 49 50 51 Subtract line 50 from line 47. This is your deductible theft loss. Include this amount on line 28 of Section B, Part I. Do not complete lines 19-27 for this loss. Then complete Section B, Part II . . . . . . . . . . . . . . . . . . . . . 41 Initial investment . . . . . . . . . Subsequent investments (see instructions) . . . . . . . . . . . . . . . . . . . . . 42 . . . . . . 43 Withdrawals for all years (see instructions) . . . . . . . . Subtract line 44 from line 43. This is your total qualified investment . . . . . . . . . . . 44 45 Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Required Statements and Declarations (See instructions.) . 51 I am claiming a theft loss deduction pursuant to Revenue Procedure 2009-20 from a specified fraudulent arrangement conducted by the following individual or entity. Name of individual or entity Taxpayer identification number (if known) Address I have written documentation to support the amounts reported in Part I of this Section C. I am a qualified investor as defined in section 4.03 of Revenue Procedure 2009-20. If I have determined the amount of my theft loss deduction using .95 on line 46 above, I declare that I have not pursued and do not intend to pursue any potential third-party recovery, as that term is defined in section 4.10 of Revenue Procedure 2009-20. I agree to comply with the conditions and agreements set forth in R