Jane Smith, age 24, is single and has no dependents. Jane works as an employee from Global Publishing and as a freelance writer (self-employed). In January 2019, Jane opened her own office. She called her freelance writing business Writers Anonymous. Both Writers Anonymous and Jane operate on a cash basis.

Self Employed Information:

Income from sale of articles $75,000

Rent 13,500

Utilities 7,900

Supplies 1,800

Insurance (business liability) 5,000

Travel (fully deductible) 2,300

Meals (while on business travel) 600

Meals (while meeting with clients) 600

Country Club (used to entertain clients) 4,000

Client entertainment expenses 1,000

Personal items:

Wages from Global Publishing $110,000

Interest from checking account from First Bank 4,000

Home mortgage interest paid to First Bank 10,000 (secured by principal residence, acquisition debt)

Home Equity Line of Credit 3,000 (secured by principal residence, used to pay off credit cards)

Property taxes on personal residence 4,000

Charitable contributions 10,700

Federal income tax withheld 26,000

State income tax withheld 8,500

During the year, Jane invested $10,000 (tax basis and at-risk basis) into XYZ limited partnership (a passive investment). Her share of the limited partnership income for the year was $6,000, and Jane received a $5,000 distribution from XYZ limited partnership.

During the year, Jane also invested $6,000 (tax basis and at-risk basis) into ABC limited partnership (a passive investment). Her share of the limited partnership loss for the year was $7,000, and Jane received a $1,500 distribution from ABC limited partnership.

In 2012, Jane started LIME Corporation (a small private C corporation) by contributing $40,000. She was the only owner. During the year, Jane sold her complete investment for $30,000.

Additionally:

(1) Jane made a $6,000 contribution to her traditional IRA account. Her employer, Global Publishing, offers a 401k that Jane contributes to.

(2) Sale of JKL publicly traded stock on 8/15/2019 for $11,000 (originally purchased for $4,000 on 1/15/2015)

(3) Sale of RST publicly traded stock on 10/15/2019 for $2,000 (originally purchased for $6,000 on 12/15/2018)

(4) Sale of a boat on 5/15/2019 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2014)

(5) Jane inherited publicly traded stock worth $30,000 from a deceased uncle on September 30, 2019

(6) Immediately after receiving the stock, Jane sold it for $30,000. This stock was originally purchased by her uncle on January 15th, 2016 for $23,000

Prepare the 2019 Federal income tax return for Jane Smith according to the 2019 tax rules (ex. entertainment expenses are NOT deductible in 2019).