Question
Kara and Brandon Arnold are married and file a joint return. Their Social Security num-bers are 000-00-1111 and 000-00-2222, respectively. Kara and Brandon have one
Kara and Brandon Arnold are married and file a joint return. Their Social Security num-bers are 000-00-1111 and 000-00-2222, respectively. Kara and Brandon have one son, Henry, age 3. His Social Security number is 000-00-3333. They live at 356 Welcome Lane, Woodbury, WA 84653. They report their income on the cash method. During 2020, they report the following items: Salary $103,000 Interest income from money market accounts 600 Dividend income from Davis Corp. stock 700 Cash contributions to church 6,000 Rental of a condominium in Lutsen: Rental income (30 days) 12,000 Interest expense 7,000 Property taxes 3,200 Maintenance 1,700 Depreciation (entire year) 7,500 Insurance 2,000 Days of personal use 16 The address of the Condo is 1127 Skyline Drive, Lutsen, WA 84666. During the year the following events also occur: a. In 2018, Brandon had loaned a friend $3,000 to help pay medical bills. During 2020, he discovers that his friend has skipped town. b. On June 20, 2020, Brandon sells Kim Corporation stock for $16,000. He purchased the stock on December 12, 2014 for $22,000. c. On September 19, 2020, Kara discovers that the penny stock of Roberts, Inc. she purchased on January 2 of the prior year is completely worthless. She paid $5,000 for the stock. Instead of accepting $60 the utility store offers for their old dishwasher, they donate it to Goodwill on November 21, 2020. They purchased the dishwasher for $750 on March 30, 2010. The new dishwasher cost $900. e. Kara and Brandon purchased a new residence for $250,000. As part of the closing costs, they pay two points, or $3,800, on the mortgage, which is interest rather than loan process-ing fees. This payment enables them to obtain a more favorable interest rate for the term of the loan. They also paid $8,400 in interest on their mortgage on their personal residence. f. They pay $4,100 in property taxes on their residence and $7,500 in state income taxes. g. On July 20, 2020, Kara and Brandon donate 1,000 shares of Anton, Inc. stock to the local community college. The value of the stock on that date is $10,200. Anton, Inc. is a listed stock. They had purchased the stock on November 10, 2012 for $1,000. h. $7,000 in federal income tax was withheld during the year. Complete Kara and Brandons Form 1040, Schedules A, B, D, and E, Form 8283 and Form 8949. For purposes of this problem, disregard the alternative minimum tax and any credits. Please I need help with that
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