i will update the price but first how can i cancel the the question thats already open, i don't want two tutors to do the same question.

Tax Project #2 Summer 2015 Due: June 24, 2015 Required: You must complete the 2013 Form 1040 and related schedules/forms discussed below. All information necessary to complete the tax return is included below. The Project must be completed in groups (of no more than 4 individuals) A cover page is required - include the names of all group members. You may either complete the project by hand, or use tax preparation software 1 Assemble the return in the following order: Cover Page Form 1040 Schedule A Schedule B Schedule C Schedule SE Schedule D Schedule E Schedule F Form 2106 Form 2441 Form 4684 Form 4797 Form 8863 FORM 1040 - U.S. INDIVIDUAL INCOME TAX RETURN Assume that the taxpayers, George A. Warden (social security number 333-33-3330) and Mary S. Warden (social security number 444-44-4440) file a joint return. Both are 50-years old, have good eyesight, and live with their three children, Edward, John and Ruth, at 789 N. Code Drive, Chicago, Illinois 60699. The Warden's home phone number is 312-555-9999. Mr. Warden elects to have $3 of his income tax go to the Presidential Election Campaign Fund. Mrs. Warden elects not to contribute. The Wardens' son, Edward, is a junior in college and he is 20 years old. He worked during the summer and earned $4,000. Their other son, John, is 17 and a high school student. He earned $3,600 during the summer and worked part-time during the remainder of the year. Neither son had any additional income. Their daughter, Ruth, is eight years old and an elementary school student. She had no earned or unearned income during the year. Edward's social security number is 300-11-0001, John's social security number is 300-22-0002, and Ruth's social security number is 300-33-0003. In August, the Wardens paid $4,000 in tuition for their son, Edward, for the academic period that started in September. Note: You must also complete and turn in Form 8863 (Education Credits) for the $4,000 of qualified expenses paid in tuition for Edward. This will be under Part I, American Opportunity Credit. Note: You should complete (but not turn in) the Child Tax Credit worksheet to determine the amount of child tax credit (line 51 of Form 1040) The Wardens claim Mrs. Warden's mother, Grace D. Taylor, as a dependent under a multiple-support agreement. The total support of Mrs. Taylor is $6,000, received from the following three sources: (1) $3,000 from Mary Warden, (2) $1,000 from another daughter, Thelma Taylor, and (3) $2,000 in social security benefits. Mrs. Grace D. Taylor lived with the Wardens during the entire year. Her social security number is 400-44-0004. Thelma Taylor provides the Warden's with a written, signed statement, that she will not claim her mother as a dependent in 2010. Thelma Taylor lives at 1425 S. 62nd Street, Chicago, IL 60699, and her social security number is 50055-0005. Note: You will NOT be required to attach/complete Form 2120 (Multiple Support Declaration) The Wardens use Trish Ford, a professional tax preparer, to prepare their income tax return. Trish Ford's PTIN is P98765432, and she works for E&Z Tax Preparation (EIN #36-0987654), which is located in a nearby suburb of Middle America (telephone number 312-555-1040). However, the Warden's do not authorize her to discuss their return with the IRS. 2 INCOME AND EXPENSES GENERALLY During the year, Mrs. Warden was employed as a salesperson by XPert Publishing Inc. Her Form W-2 for the year reports the following: Box 1. Wages, tips and other compensation $75,000 Box 2. Federal income tax withheld $4,950 Box 4. Social security tax withheld $4,650 Box 6. Medicare tax withheld $1,088 Box 17. State income tax $2,250 Mrs. Warden is not covered by her employer's retirement plan. In addition, Mr. Warden is a self-employed individual who does not maintain a Keogh or a SEP plan. Mrs. Warden made a $1,500 contribution to a traditional IRA and a $2,000 contribution to a Roth IRA during the year. Mr. Warden decided against making a contribution to a traditional IRA. The Wardens received a $30 state income tax refund. They itemized in the prior year and elected to take their $2,000 state income tax payment as a deduction. The Wardens also received a $20 federal income tax refund. Note: The taxpayer should not be subject to the Alternative Minimum Tax (Form 6251) so you are not required to complete the AMT form. Form 1040, Schedule A The Wardens made federal estimated tax payments of $2,000 during the year. The Wardens incurred the following medical expenses: prescription drugs, $1,000; doctor bills, $3,550; hospital bills, $1,750; transportation, $100; and eyeglasses, $500. In addition, Mr. Warden, who is self-employed, paid $3,750 in premiums for health insurance coverage for himself and his family. 3 The Wardens paid their real estate taxes of $1,810 on July 1. In addition, they sold their residence on September 13th of this year. They allowed the buyer a credit equal to 70% of the estimated real estate taxes of $2,000 for the year. The real estate taxes on the new property they purchased on May 1, are not payable until next year. There was no taxable gain on the sale of their prior residence. Mr. and Mrs. Warden paid $3,878 in deductible home mortgage interest to a bank. They also paid $3,000 in points when they purchased their new home. They paid the following personal interest: $600 to finance Mrs. Warden's car, and $400 in credit card interest. The Wardens gave $1,500 in cash to various recognized charities; no individual gift was $250 or more; all charities sent an acknowledgment of the contribution. Form 2106 (Employee Business Expenses) Mrs. Warden incurred employee business expenses in connection with her occupation as salesperson for the publishing company. On January 3, she purchased a new car that was used primarily for business reasons. The car cost $20,000. During the year, the car was driven a total of 20,000 miles by Mrs. Warden. Of those miles, 16,600 were business related. Mrs. Warden drove 1,250 miles while commuting (five-mile daily roundtrip commute), and 2,150 miles for personal purposes. Mrs. Warden depreciates the car using a five-year MACRS recovery period, the 200% declining-balance method, and the half-year convention. However, it should be noted that depreciation on the car is limited because of the \"listed property\" rules. Mrs. Warden's gasoline, oil and insurance expenses on the car amounted to $4,750. She paid $600 in interest on the installment loan incurred to purchase the car. She also paid $50 for business parking fees and $75 for a car rental while away from home. Mrs. Warden elects to claim the actual automobile-related expenses. Assume the answers for Form 2106, Lines 18, 19, 20 and 21 are \"Yes.\" Mrs. Warden elected not to claim any Code Sec. 179 deduction or additional bonus depreciation on the car. Mrs. Warden incurred the following other business expenses: meals and entertainment, $1,500; airfare, $233; gifts to customers, $150; and business seminar, $60. Mrs. Warden received $5,000 as a car expense reimbursement from her employer under a plan that required her to account for the expenses. The $5,000 was not reported on her Form W-2. Mrs. Warden was not reimbursed for her other business expenses. 4 The Wardens paid $500 for the preparation of last year's tax return (including $200 for the preparation of Schedule C, Profit or Loss from Business for George Warden's furniture business), $50 for the rental of a safe deposit box where they stored their securities, and $350 for investment publications. Form 4684 (Casualties & Theft), Section A A burglar entered their home and stole a ring and a coin collection. The ring had been purchased in May 15, 1990 at a cost of $3,000. Mrs. Warden had purchased the coin collection in July 15, 1991 at a cost of $1,100. An insurance company appraised the ring at a fair market value of $5,000, but limited its loss coverage on jewelry under a homeowners' policy to $1,500. The insurance company excluded the coin collection from the insurance policy because of its policy restrictions on such items. At the time of the theft, the fair market value of the coin collection was $2,000. Form 1040, Schedule B (Interest & Dividends) During the year, the Wardens received $500 in interest from the Heartland National Bank and $150 as nominees from the Third National Savings and Loan. They received $200 in interest from tax-exempt bonds issued by the state of Illinois. The Warden's received the following qualified dividends: $600 from E&Z Tax Preparation, Inc., $700 from Secure Money Market Fund, and $450 from Rapid Growth Mutual Fund. They also received a $100 capital gain distribution from Rapid Growth. In addition, the Warden's received $700 in nonqualied foreign corporation dividends from Consolidated Tapioca, and paid foreign taxes of $10 to various countries in connection with this investment. The responses to the questions on Part III of Schedule B are \"No.\" Note: The $10 paid in foreign taxes can be taken as a credit on line 47 of Form 1040. Note: the $150 nominee distribution is not taxable. Note: You should complete (but not turn in) the qualified dividends and capital gain tax worksheet in order to compute your total tax liability Form 1040, Schedule D (Capital Gain/Loss) During the year, the Wardens sold the following capital assets: (1) On February 2, 100 shares of Ahab Inc. were sold for $1,000. They had been purchased on November 12, 2013 for $2,500. (2) On November 5, 200 shares of Pequod Inc. were sold for $5,000. They had been purchased on January 5, 2010 for $2,000. (3) On December 4, 100 shares of Squall Inc. were sold for $10,000. They had been purchased on January 4, 2000 for $4,000. 5 (4) On December 10, 200 shares of Kismet Inc. were sold for $5,000. They had been purchased on September 5, 2004 for $2,000. (5) On December 15, a number of gold coins were sold for $2,000. The coins had been purchased on October 15, 2003 for $3,000. Form 1040, Schedule E (Rental) Mr. and Mrs. Warden own and rent a brick two-at apartment building located at 12 West 5th Ave., Chicago, Illinois 60626. The apartment building is not used for personal purposes by either the Wardens or members of their family. Mr. Warden actively participates in the operation of the building. The Wardens received rents of $12,000. Their expenses are as follows: cleaning and maintenance, $2,500; mortgage interest, $4,000; repairs, $750; advertising, $500; insurance, $1,000 and real estate taxes, $1,250. The current depreciation figure, taken from the Wardens' work papers (not reproduced), is $3,000. Note: Use $3,000 for depreciation expense on line 20 of Schedule E. Form 2441 (Child & Dependant Care Expenses) During the year, the Wardens' daughter, Ruth, attended two child care centers. They were: Happy Day Care, 4210 W. Maple, Chicago, Illinois 60699, whose identification number is 36-0987654; and Greenelds Day Care, 901 N. Ash, Chicago, Illinois 60699, whose identification number is 36-1234567. The Wardens paid $3,720 to Happy Day Care and $1,860 to Greenelds Day Care. The Wardens did not receive employerprovided dependent care benefits. BUSINESS INCOME Form 1040, Schedule C Mr. Warden operated Interiors Unlimited, selling home furnishings at retail, as a sole proprietor during the entire year. The business address is 45 Boswell Blvd., Villa Park, Illinois 60181. His employer identification number is 36-3456789. The business code is 442200. In order to clearly show business income, Mr. Warden maintains an inventory at cost and he uses the accrual method of accounting for his sales and purchases. Total gross receipts of the business were $127,247 and returns and allowances amounted to $1,500. The business books showed the following information: 6 Inventory at beginning of year (valued at cost) . . . . . . . . . . . . . $35,000 Merchandise purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70,000 Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22,000 Truck expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .550 Other interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300 Rent (property) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800 Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .280 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,541 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450 Utilities and telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240 Legal and accounting (includes $200 of tax preparation fees) . . . . . . . . . . . . . . . . . . . . . . .400 Office expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125 Depreciation . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,858 Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .400 Meals and entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,040 Miscellaneous . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .330 Note: As a self-employed person, he must also complete Schedule SE to calculate self-employment taxes Note: the meals & entertainment expense are GROSS amounts (i.e. before the 50% limit) Form 4562 (Depreciation) NOTE: the information below is used to calculate total depreciation expense of $7,858 (line 13 of Schedule C). Due to the complexity of depreciation calculations for the assets placed in service before the current year, I will NOT require you to complete/turn in Form 4562. Ensure that your Schedule C, line 13 has $7,858. On January 10, Mr. Warden purchased office furniture at a cost of $5,000. The furniture is used 100% for business. It is seven-year MACRS property. Mr. Warden elects to expense $1,000 of the cost under Code Sec. 179. Mr. Warden elected not to claim any bonus depreciation available for any business property placed in service during the year. On July 15, Mr. Warden purchased a pickup truck for use in his business. It was driven 8,000 miles. The truck, used 100% for business, cost $47,000 and sales tax was $3,000, for a basis of $50,000. The truck is considered five-year MACRS property. Also, it falls in the classification of a light, general-purpose truck, subject to depreciation limits. On June 15, 2006, Mr. Warden purchased fixtures for the store. The current 7 depreciation deduction for the fixtures is $536. Mr. Warden bought a brick building on July 1, 1998, $75,000 of the price being allocable to the building for depreciation purposes. No capital improvements were made. Depreciation on the building is computed by using the MACRS method. The allowable MACRS deduction would be calculated at the rate of 2.564%. Details of the Depreciation Deduction: Descriptio Life Cost Reductio n n in Basis Pickup Furniture Fixtures Building Garage* Garage 5 7 7 39 39 30.2 5 50,000 5,000 6,000 75,000 25,000 22,028 1,000 Basis for Depreciatio n Accumulate d Depreciatio n 50,000 4,000 6,000 75,000 25,000 22,028 Current Section 179 1,000 4,125 22,036 5,422 TOTAL * details on this garage are under \"Casualty and theft\" below Depr. Deduction 3,060 1,571 536 1,923 454 214 7,758 Form 4684 (Casualty & Theft - Section B - Business Property) On September 1, a garage that had been purchased for $25,000 on July 1, 2001, and used exclusively for Mr. Warden's business was damaged by fire. In order to repair the garage after the fire, Mr. Warden spent $7,795. The repairs are considered to be an improvement to the property, which, prior to the casualty, was being depreciated under the MARCS method for nonresidential property. The amount of depreciation claimed prior to the current year was $5,422. Mr. Warden uses Form 4684, Section B, to determine the recognized casualty gain or loss from the fire damage to the garage. Assume that the fair market value of the garage was $24,650 before the fire and it had a fair market value immediately after the fire of $14,760. Assume, in completing Form 4684, that the total amount of depreciation that Mr. Warden had claimed for the garage up to the date of the fire was $5,876 and that he had received $5,000 from a fire insurance policy he had on the garage. After the fire, and taking into account the allowable loss deduction, the cost of repair and the insurance recovery, the new adjusted basis of the garage for depreciation purposes is $22,028. Since the basis had to be adjusted, the garage will be depreciated on a straight-line method for the remainder of the original depreciation period. The allowable MACRS deduction for the year would be calculated based on a rate of 3.33% per year using a mid-month convention. NOTE: for Section B, Part I, line 23 (cost or adjusted basis of each property), put $19,124. Note: the resulting amount on line 41a flows to Form 4797, line 14 8 Form 4797 (Sale of Business Property) On January 3, Mr. Warden sold a business truck for $550. He had purchased the truck for $5,000 on March 12, 2001. Total depreciation allowed or allowable on the truck prior to the current year was $5,000. This information is entered in Part III, lines 20 through 25 - it is considered Section 1245 property. FARM INCOME AND EXPENSES Form 1040, Schedule F Mr. Warden owned and operated a farm in Illinois. The Principal Agricultural Activity Code for this farm is 112111, and the principal product raised is beef cattle. Mr. Warden utilizes the cash basis to report farm income and expenses. His books and records show the following information: Farm income ....................................................................Amount Livestock sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,500 Cooperative distributions ($30 nontaxable) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150 Farm expenses Livestock purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15,000 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 Feed purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .750 Freight and trucking. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .250 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .400 Labor hired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 3,000 Other interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Pasture rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .300 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .450 Veterinary fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .500 Assume that Mr. Warden's cost basis in the livestock sold during the year was $19,500. Note: Don't forget that any profits from a farm activity on Schedule F are subject to selfemployment taxes (Schedule SE). 9