Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. Determine Kens gross income and complete page 2 of Form 1040 (through line 6) and Schedule 1 for Ken.

A. Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal)

B.Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share.

C.Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000.

D.Ken received $13,000 in disability benefits for the year. He purchased disability insurance policy last year.

E.Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment.

F.Kens son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100.

G.Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000).

H.Ken received $30,000 of interest from corporate bonds and money market accounts.

tax forms 75. Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he Page 5-45 is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. Determine Ken's gross income and complete page 2 of Form 1040 (through line 6) and Schedule 1 for Ken. a) Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b) Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c) Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. d) Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. e) Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. f) Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100. g) Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000). h) Ken received $30,000 of interest from corporate bonds and money market accounts. Department of the Treasury-Internal Revenue Service (99) EU4 1040 U.S. Individual Income Tax Return 2018 MB No. 1545-0074 | IRS u | OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Filing status: Single Married filing jointly Married filing separately Head of household Qualifying widower) Your first name and initial Last name Your social security number You were born before January 2, 1954 Your standard deduction: Someone can claim you as a dependent If joint return, spouse's first name and initial Last name You are blind Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual-status alien Home address (number and street). If you have a P.O.box, see instructions. Apt. no. Full-year health care coverage or exempt (see inst.) Presidential Election Campaign (see inst.) You Spouse City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see inst, and here Dependents (see instructions): (1) First name (2) Social Security number (3) Relationship to you (4) if qualifies for (see inst.): Child tax credit Credit for other dependents Last name Sign Under penalties of perjury, I declare that I have examined this retum and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation If the IRS sent you an Identity Protection Joint return? PIN, enter it here see inst. See instructions. Keep a copy for Spouse's signature. If a joint return, both must sign. h must sign. Date Spouse's occupation If the IRS sent you an Identity Protection PIN. enter it your records. here (see inst Preparer's name PTIN Preparer's signature Firm's EIN Check if: Paid 3rd Party Designee Preparer Firm's name Phone no. Self-employed Use Only Firm's address For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Fom 1040 (2018) Form 1040 (2018) Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . 2a Tax-exempt interest.. . 2a b Taxable interest .. . Attach Formis W-2 Also attach 3a Qualified dividends. . . 3a b Ordinary dividends . .. Formis) W-2G and 1099-Rif tax was IRAS, pensions, and annuities. 4a b Taxable amount.. . withheld. 5a Social security benefits. . 5a b Taxable amount. . . Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6 . . Standard . Deduction for 8 Standard deduction or itemized deductions (from Schedule A) .. .. . Single or married filing separately. Qualified business income deduction (see instructions) . . . . . . . $12,000 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O- . . . Married filing jointly or Qualfying 11 a Tax (see inst.) (check if any from: 1 Form(s) 8814 2 Form 4972 30 widowler $24,000 b Add any amount from Schedule 2 and check here . . . . . . . . . . . . Head of a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here household Subtract line 12 from line 11. If zero or less, enter-O- . . . . . . . . . . . . . . If you checked Other taxes, Attach Schedule 4. . . . . . . . . . . . . . . . . . . any box under Slanderd Total tax. Add lines 13 and 14 . . . . . . . . . . . . . . . . . . deduction, Federal income tax withheld from Forms W-2 and 1099 . . . . . . see instructions. . . . . . . . Refundable credits: a EIC (see inst.) _b Sch. 8812 c Form 8863 Add any amount from Schedule 5 . . . . . . . . . . . . 18 Add lines 16 and 17. These are your total payments Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid. . . . 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here . . Direct deposit? Routing number U c Type: Checking Savings See instructions d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax . . 21 Amount You Owe 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions . . ., 23 Estimated tax penalty (see instructions). . : .. . . .... 23 Go to www.irs.gov/Form1040 for instructions and the latest information. $18,000 114 14 15 | 16 17 20a Form 1040 (2018) OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2018 Department of the Treasury Internal Revenue Service Attach to Form 1040. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Name(s) shown on Form 1040 17 19 20a Res Additional 1-9b Reserved . . . . . . . . . . . . . . . . . . . . . . . . 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes . . 11 Alimony received . 11 12 Business income or (loss). Attach Schedule C or C-EZ 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 14 Other gains or losses). Attach Form 4797 | 14 15a Reserved Reserved . . . . . . . . . . . . . . . . . . . . 15b 16a Reserved Reserved . . . . . . . . . . . . . . . . . . . . . . . . 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 18 Farm income or (loss). Attach Schedule F. . .. | 18 19 Unemployment compensation Reserved . . . . . . . . . . . . . . . . . . . . . . 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23. : | 22 Adjustments 23 Educator expenses............ 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 .. 24 25 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 . . . . . . . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE 27 Self-employed SEP, SIMPLE, and qualified plans... | 28 29 Self-employed health insurance deduction ... 29 30 Penalty on early withdrawal of savings.. . . . 30 Alimony paid b Recipient's SSN 31a 32 IRA deduction . . . . . . . . , 32 33 Student loan interest deduction .. . 33 34 Reserved . . . . . . . . . . . . 34 35 Reserved . . . . . . . . . . . . . . 35 36 Add lines 23 through 35 . . . . . . . . . . . . . . 30 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 28 tax forms 75. Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he Page 5-45 is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. Determine Ken's gross income and complete page 2 of Form 1040 (through line 6) and Schedule 1 for Ken. a) Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b) Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c) Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. d) Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. e) Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. f) Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100. g) Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000). h) Ken received $30,000 of interest from corporate bonds and money market accounts. Department of the Treasury-Internal Revenue Service (99) EU4 1040 U.S. Individual Income Tax Return 2018 MB No. 1545-0074 | IRS u | OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Filing status: Single Married filing jointly Married filing separately Head of household Qualifying widower) Your first name and initial Last name Your social security number You were born before January 2, 1954 Your standard deduction: Someone can claim you as a dependent If joint return, spouse's first name and initial Last name You are blind Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual-status alien Home address (number and street). If you have a P.O.box, see instructions. Apt. no. Full-year health care coverage or exempt (see inst.) Presidential Election Campaign (see inst.) You Spouse City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see inst, and here Dependents (see instructions): (1) First name (2) Social Security number (3) Relationship to you (4) if qualifies for (see inst.): Child tax credit Credit for other dependents Last name Sign Under penalties of perjury, I declare that I have examined this retum and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation If the IRS sent you an Identity Protection Joint return? PIN, enter it here see inst. See instructions. Keep a copy for Spouse's signature. If a joint return, both must sign. h must sign. Date Spouse's occupation If the IRS sent you an Identity Protection PIN. enter it your records. here (see inst Preparer's name PTIN Preparer's signature Firm's EIN Check if: Paid 3rd Party Designee Preparer Firm's name Phone no. Self-employed Use Only Firm's address For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Fom 1040 (2018) Form 1040 (2018) Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . 2a Tax-exempt interest.. . 2a b Taxable interest .. . Attach Formis W-2 Also attach 3a Qualified dividends. . . 3a b Ordinary dividends . .. Formis) W-2G and 1099-Rif tax was IRAS, pensions, and annuities. 4a b Taxable amount.. . withheld. 5a Social security benefits. . 5a b Taxable amount. . . Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6 . . Standard . Deduction for 8 Standard deduction or itemized deductions (from Schedule A) .. .. . Single or married filing separately. Qualified business income deduction (see instructions) . . . . . . . $12,000 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O- . . . Married filing jointly or Qualfying 11 a Tax (see inst.) (check if any from: 1 Form(s) 8814 2 Form 4972 30 widowler $24,000 b Add any amount from Schedule 2 and check here . . . . . . . . . . . . Head of a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here household Subtract line 12 from line 11. If zero or less, enter-O- . . . . . . . . . . . . . . If you checked Other taxes, Attach Schedule 4. . . . . . . . . . . . . . . . . . . any box under Slanderd Total tax. Add lines 13 and 14 . . . . . . . . . . . . . . . . . . deduction, Federal income tax withheld from Forms W-2 and 1099 . . . . . . see instructions. . . . . . . . Refundable credits: a EIC (see inst.) _b Sch. 8812 c Form 8863 Add any amount from Schedule 5 . . . . . . . . . . . . 18 Add lines 16 and 17. These are your total payments Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid. . . . 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here . . Direct deposit? Routing number U c Type: Checking Savings See instructions d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax . . 21 Amount You Owe 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions . . ., 23 Estimated tax penalty (see instructions). . : .. . . .... 23 Go to www.irs.gov/Form1040 for instructions and the latest information. $18,000 114 14 15 | 16 17 20a Form 1040 (2018) OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2018 Department of the Treasury Internal Revenue Service Attach to Form 1040. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Name(s) shown on Form 1040 17 19 20a Res Additional 1-9b Reserved . . . . . . . . . . . . . . . . . . . . . . . . 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes . . 11 Alimony received . 11 12 Business income or (loss). Attach Schedule C or C-EZ 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 14 Other gains or losses). Attach Form 4797 | 14 15a Reserved Reserved . . . . . . . . . . . . . . . . . . . . 15b 16a Reserved Reserved . . . . . . . . . . . . . . . . . . . . . . . . 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 18 Farm income or (loss). Attach Schedule F. . .. | 18 19 Unemployment compensation Reserved . . . . . . . . . . . . . . . . . . . . . . 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23. : | 22 Adjustments 23 Educator expenses............ 23 to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 .. 24 25 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 . . . . . . . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE 27 Self-employed SEP, SIMPLE, and qualified plans... | 28 29 Self-employed health insurance deduction ... 29 30 Penalty on early withdrawal of savings.. . . . 30 Alimony paid b Recipient's SSN 31a 32 IRA deduction . . . . . . . . , 32 33 Student loan interest deduction .. . 33 34 Reserved . . . . . . . . . . . . 34 35 Reserved . . . . . . . . . . . . . . 35 36 Add lines 23 through 35 . . . . . . . . . . . . . . 30 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 28