Joe and Jill Biding are married taxpayers who live at 666, Cooperation Drive, Washington, DC. Joe is 65 years old, while Jill is 48. Their social security numbers are 123-45-6789 (Joe) and 123-45-6781 (Jill). The taxpayers elect to contribute to the election campaign fund. Joe and Jill have six possible (you decide) dependents. 1. Their oldest daughter, Harris (SS# 423-44-3113), is 19 years old and works in Washington, DC where she lives in her own apartment. She is a part-time student at Georgetown majoring in the theatrical arts. She worked earning $4,500. Joe and Jill provided over half of her support. 2. They have a daughter, Yellen, who is 20 years old, goes to college full-time and worked in the summer earning $4,500 (ss# 424-77-6666). She also had unearned income of $2,000 in 2022. 3. They have had a foster child, Hunter, living with them since 06/01/22. He is 8 years old and his Social Security number is 422-45-9843. He attended the "Donkey's Daycare" ID # 67-08980808 at a cost of $8,200. 4. Joe's mother, Catherine (ss# 555-22-3333), is 94 years old and lives in a nursing home for medical reasons. Her gross income is $45,000 and is fully taxable. Joe and Jill provide her $2,000 per month to help cover some of the cost of the nursing home. Her social security number is 455-23-8998. 5. Jill's father, Donald, lives with them and is a greeter at Targ-Mart. He earned $13,250 from the job. Joe and Jill provided over 50% of the support of her father. His social security number is 476-99-7374. 6. Joe's good friend from college, Sven, is down on his luck and living in Mexico. He earned $1,000 for the year. Joe sends him $1,500 per month. He has no social security number. 2 Joe is a lobbyist for the Politico Corporation, which has an excellent retirement plan for its employees (Joe participates in plan). Joe and Jill receive their health and dental insurance through Politico Corporation. His form W-2 shows his annual salary, federal income tax withholdings, and state income tax withholdings. Wages $ 530,000 Federal Withholding Taxes 145,000 State Withholding Taxes 28,000 During 2022, Joe and Jill received interest and dividend (total and qualified) income from several institutions. This information is summarized below from their Forms 1099-DIV and 1099-INT. In addition, Jill received $10,000 interest on New York City bonds. Bank for Savings (Interest) $ 5,001 Oversees Corporation (Dividend) 3,450 Do Not Bribe Me Corporation (Dividend) 2,360 Do Not Bribe Me Corporation (Long Term Capital Gain Distribution) 1,500 Joe and Jill's personal records indicate that the following personal expenses were incurred in 2022. Trips to Los Angeles - airfare and lodging. . . . . . . $ 15,549 while meals. . . . . . . . . . . . . . . . . . .. . . . . 5,018 entertainment. . . . . . . . . . . . . . . . . .. . . . . 3,293 (trips were to visit family members) Preparation fee for 2021 tax return (paid in 2022) . . . . 6,740 Health insurance premiums for the family . . . . . . . . . 9,005 Unreimbursed physician charges . . . . . . . . . . . . . . 5,013 Property taxes . . . . . . . . . . . . . . . . . . . . . . 3,450 Sales taxes . . . . . . . . . . . . . . . . . . . . . . . 10,422 Prescription drugs . . . . . . . . . . . . . . . . . . . . 1,848 Non-prescription drugs . . . . . . . . . . . . . . . . . . 5,823 Contributions made in cash to United Way . . . . . . . . . 6,053 Contributions made in cash to qualified charity . . . . . 1,383 3 Home mortgage interest (qualifying residential) . . . . . 15,834 Home mortgage interest on Condominium (secondary home) . . . . . . . . . . 4,949 Credit Card interest . . . . . . . . . . . . . . . . . . . 29,375 Job hunting expenses . . . . . . . . . . . . . . . . . . . 5,098 Personal property tax on value of personal autos . . . . . 1,500 Estimated state income tax payments by Jill in 2022 . . . . 6,000 Contributions of LT capital gain property (stock) . . . . . Cost 5,437 (to a qualified charity who sold it immediately) FMV 10,820 Groceries . . . . . . . . . . . . . . . . . . . . . . . . . 8,186 Joe and Jill incurred the following transactions involving capital assets in 2022. On May 8, 2022, Jill sold 600 shares of iTeach Corporation stock. Her basis in the stock was $7,220 (May 12, 1998) and she sold it for $18,200. On February 3, 2022, the Biding's sold 2,000 shares of Commodity stock for $12,654. Joe had inherited the stock from his grandmother. His grandmother had originally purchased it for $4,000 on June 12, 1999. The stock was worth $6,937 on the date of her death. On October 30, 2022, the Biding's discovered that their 1,000 shares of Bad Corporation stock was worthless. Jill had purchased the shares for $12,000 in 2004. On December 5, 2022, Joe sold a personal car that he had purchased from his dad for $8,000 on December 4, 2008. He sold it for $1,300. The Bidings own and rent-out another vacation house in Wilmington, Delaware which was used for personal purposes by the Bidings for 29 days and rented for 101 days. They received rents of $28,565 in 2022. Their expenses are as follows: cleaning and maintenance, $6,890; commissions, $3,500; real estate taxes, $8,501; utilities $6,092 and insurance $3,000. Their house was acquired on June 30, 2013 for $1,300,000. They spend less than 20 hours per year dealing with the rental property. 4 Answer the following (10) questions (#2 has 3 parts): 1. How many total exemptions (dependency and personal) do the Bidings have? 2. Which line and Form/Schedule do the following go? a. Wages b. Federal Withholding c. State Withholding 3. Calculate total B (interest and dividends) for Schedule B. 4. Calculate Schedule A itemized deductions for each category. 5. Calculate the short-term (line 7) and long-term (line 15) capital gains or losses from Schedule D. [Don't forget about capital gain distributions.] 6. Calculate the vacation home amount that will be reported on line 26 of Schedule E (IRS approach). 7. Would you advise your client, The Bidings, to itemize or take the standard deduction? USE THE 2022 TAX FORMS FROM THE IRS WEBSITE