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. 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. 9. 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. Determine Ken's gross income. Gross income $ 58,000 1040 for a single taxpayer. 1040 PG 2 Schedule 1 Pape 2 Page 2 of Form 1040 Form 1040 (2010) 1 Wages, salaries, tips, elo Atach Form W-2 2a Tax-exempt interest 2a Attach Form() W2 Also wilachem w. 30 Qualified dividends 30 20 and 1000-R 4a IRAs, pensions, and annutes 40 was withheld 5a Social Security benefits 6 Total income. Add Ines 1 through. Add any amount from Schedule 1, ine 22 Taxable interest Ordinary dividends Taxable amount b Taxable amount 1 21 30 45 6b 6 0 K1040 PO Schedule 1 > Schedule 1 of Form 1040. Additional Income and Adjustments to Income OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 2018 Attach to Form 1040 Go to www.irs.gowdForm 1040 for instructions and the latest information Attachment Sequence No. 01 Your social security number Additional Income 1-96 10 11 12 1-9b Reserved 10 Taxable refunds, credits, or offsets of state and local income taxes 11 Alimony received 12 Business income or(s) Attach Schedule Cor C-EZ 13 Capital gain or loss). Altach Schedule Dif required. If not required, check here 14 Other gains or (ots) Attach Form 4797 15a Reserved 16a Reserved 17 Rental real estate, royalties, partnerships, corporation, trusts, etc. Astach Schedule 18 Farm income or (ss). Atach Schedule 19 Unemployment compensation 20a Reserved 21 Other Income. List type and amount 22. Combine the amounts in the far right column if you don't have any adjustments to income, enter here and on Form 1040, Ine 6. Otherwise, go to line 23 13 14 150 16b 17 18 19 206 21 22
