Individual tax forms required:
Form 1040
Schedule A
Schedule B
Schedule D
Schedule E
Form 8949
Form 4797 (see item 4.i. below)
Dr. Leisa Baileys social security number is 456-12-3789. She is married but does not have any dependents. Her husbands name is Daniel Bailey and his social security number is 123-45-6789.
Additional information to complete the tax returns:
Daniel works at Intel Corporation and earned $160,000 during 2017.
His federal tax withholding was $30,000 and his Arizona income taxes withheld were $8,000. Leisa made federal estimated tax payments of $40,000 and Arizona estimated payments of $9,500
Mortgage interest on their personal residence was $15,200 and property taxes were $5,150.
Additional charitable contributions of $2,750 were paid during the year.
On July 10, 2017 they sold 100 shares of Intel Corporation stock for $70 per share. They purchased the stock on May 1, 2012 for $56 per share.
The Taxpayers have a long-term capital loss carry forward of $5,000.
Assume AMT does not apply.
Apply any refund to estimated tax payments for the next year.
Instead of preparing Form 4797, input any gain/loss from the Sec. 1231 asset on line 14 of form 1040.
Use 2017 tax forms only (points will be deducted for using incorrect forms).
Healthwise Medical Supplies Company is located at 2400 Second Street, City, ST 12345 The company is a general partnership that uses the calendar year and accrual basis for both book and tax purposes. It engages in the development and sale of specialized surgical tools to hospitals. The employer identification number (EIN) is XX-2018016. The com- pany formed and began business on January 1, 2015. It has no foreign partners or other foreign dealings. The company is neither a tax shelter nor a publicly traded partnership The company has made no distributions other than cash, and no changes in ownership have occurred during the current year. Dr. Bailey is the Tax Matters Partner. The partner- ship makes no special elections. Table C:9-3 contains book balance sheet information at the beginning and end of the current year, and Table C:9-4 presents a book income state- ment for the current year. Other information follows: C:9-58 Information on Partnership Formation Two individuals formed the partnership on January 1, 2015: Dr. Leisa H. Bailey (1200 First Pike, City, ST 12345) and Dr. Thomas J. Firth (3600 Third Blvd., City, ST 54321) For a 30% interest, Dr. Bailey contributed $600,000 cash. She is an active general partner who manages the company. For a 70% interest, Dr. Firth contributed $1.16 million cash and 1,000 shares of Fastgrowth, Inc. stock having, at the time of contribution, a $240,000 fair market value (FMV) and a $48,000 adjusted basis. Dr. Firth is an active general part- ner who designs and develops new products. For book purposes, the company recorded the contribution of stock at fair market value. Inventory and Cost of Goods Sold (Form 1125-A) The company uses the periodic inventory method and prices its inventory using the lower of FIFO cost or market. Only beginning inventory, ending inventory, and purchases should be reflected in Schedule A. No other costs or expenses are allocated to cost of goods sold. Note: the company is exempt from the uniform capitalization (UNICAP) rules because average gross income for the previous year was less than $10 million [Sec. 263A(b)(2)(B)]. Line 9 (a) Check (ii) (b)H(d Not applicable (e) & (f) No Capital Gains and Losses (Schedule D) The company sold all 1,000 shares of the Fastgrowth, Inc. common stock on July 2, 2016, for $720,000. Dr. Firth acquired the stock on January 2, 2013, for $48,000 and contrib- uted the stock to the company on January 1, 2015, when its FMV was $240,000 TABLE C:9-3 Healthwise Medical Supplies Company-Book Balance Sheet Information January 1, 2016 Debit December 31, 2016 Debit Account Credit Credit Cash Accounts receivable Inventory Investment in municipal bonds Investment in corporate stock Equipment Accumulated depreciation- $ 233,500 540,000 1,000,000 40,000 240,000 1,000,000 s 143,450 600,000 1,200,000 40,000 1,400,000 S 142,900 100,000 750,000 3,500 Equipment Accounts payable Notes payable (short-term) Accrued payroll expenses Capital account balances: S 787,800 130,000 150,000 5,250 Dr. Leisa H. Bailey (3096) Dr. Thomas J. Firth (7096) 617,130 1,439,970 693,120 1,617,280 $3,383,450 $3,053,500 $3,053,500 $3,383,450 $5,000,000 (250,000) $4,750,000 Returns and allowances $1,000,000 2,000,000 (1,200 (1,800,000) $2,950,000 Depreciation (including Sec. 179) 3 2 Guaranteed payment (to Dr. Bailey) Charitable contributions (cash) (1,991,500) 1,600 13,200 $720,000 (240,000) 480,000 $1,453,300 Healthwise Medical Supplies Company is located at 2400 Second Street, City, ST 12345 The company is a general partnership that uses the calendar year and accrual basis for both book and tax purposes. It engages in the development and sale of specialized surgical tools to hospitals. The employer identification number (EIN) is XX-2018016. The com- pany formed and began business on January 1, 2015. It has no foreign partners or other foreign dealings. The company is neither a tax shelter nor a publicly traded partnership The company has made no distributions other than cash, and no changes in ownership have occurred during the current year. Dr. Bailey is the Tax Matters Partner. The partner- ship makes no special elections. Table C:9-3 contains book balance sheet information at the beginning and end of the current year, and Table C:9-4 presents a book income state- ment for the current year. Other information follows: C:9-58 Information on Partnership Formation Two individuals formed the partnership on January 1, 2015: Dr. Leisa H. Bailey (1200 First Pike, City, ST 12345) and Dr. Thomas J. Firth (3600 Third Blvd., City, ST 54321) For a 30% interest, Dr. Bailey contributed $600,000 cash. She is an active general partner who manages the company. For a 70% interest, Dr. Firth contributed $1.16 million cash and 1,000 shares of Fastgrowth, Inc. stock having, at the time of contribution, a $240,000 fair market value (FMV) and a $48,000 adjusted basis. Dr. Firth is an active general part- ner who designs and develops new products. For book purposes, the company recorded the contribution of stock at fair market value. Inventory and Cost of Goods Sold (Form 1125-A) The company uses the periodic inventory method and prices its inventory using the lower of FIFO cost or market. Only beginning inventory, ending inventory, and purchases should be reflected in Schedule A. No other costs or expenses are allocated to cost of goods sold. Note: the company is exempt from the uniform capitalization (UNICAP) rules because average gross income for the previous year was less than $10 million [Sec. 263A(b)(2)(B)]. Line 9 (a) Check (ii) (b)H(d Not applicable (e) & (f) No Capital Gains and Losses (Schedule D) The company sold all 1,000 shares of the Fastgrowth, Inc. common stock on July 2, 2016, for $720,000. Dr. Firth acquired the stock on January 2, 2013, for $48,000 and contrib- uted the stock to the company on January 1, 2015, when its FMV was $240,000 TABLE C:9-3 Healthwise Medical Supplies Company-Book Balance Sheet Information January 1, 2016 Debit December 31, 2016 Debit Account Credit Credit Cash Accounts receivable Inventory Investment in municipal bonds Investment in corporate stock Equipment Accumulated depreciation- $ 233,500 540,000 1,000,000 40,000 240,000 1,000,000 s 143,450 600,000 1,200,000 40,000 1,400,000 S 142,900 100,000 750,000 3,500 Equipment Accounts payable Notes payable (short-term) Accrued payroll expenses Capital account balances: S 787,800 130,000 150,000 5,250 Dr. Leisa H. Bailey (3096) Dr. Thomas J. Firth (7096) 617,130 1,439,970 693,120 1,617,280 $3,383,450 $3,053,500 $3,053,500 $3,383,450 $5,000,000 (250,000) $4,750,000 Returns and allowances $1,000,000 2,000,000 (1,200 (1,800,000) $2,950,000 Depreciation (including Sec. 179) 3 2 Guaranteed payment (to Dr. Bailey) Charitable contributions (cash) (1,991,500) 1,600 13,200 $720,000 (240,000) 480,000 $1,453,300
