Kimmie A. (age 49), SSN 111-22-1111, is a widow of Richard Gibbler, SSN 123-45-6787, who passed away on February 1, 2016. Kimmie resides at 10 Devine Way, Boston, MA 02127. Kimmie works part-time as a Cashier at a warehouse (Cutco, Co) and is also self-employed. She owns her own tax preparation business that she operates in town. The following filing information relates to Kimmie: Kimmie is not sure what filing status she should be in 2017 since her husband passed away in 2016. Kimmie elects to contribute to the Presidential Election Campaign Fund. Kimmie is a calendar year taxpayer. Kimmie follows the cash basis method. Kimmie prefer that any tax overpayment to be refunded to her. Round all cents to the nearest dollar (Round up .50 Round down .49) No cents on the return. 1. Kimmies annual salaries from Cutco, Co is included on the attached W-2s. Cutco, Co does not provide any retirement benefits. Kimmie has a retirement account that she contributes to through her business. 2. Kimmie is a tax preparer who owns a tax preparation business called Taxes R Us. Kimmie rents office space in Boston, on 45 Commercial Street, Boston, MA 02109. She also makes deliveries of tax returns to her clients. She uses her personal car to make the deliveries. Her professional activity code is 541219 and her employer identification number is 04-9876543. Her clients consist of small to medium size local businesses and individuals. Kimmie collected $92,174 in revenues during 2017. This total includes a $1,015 payment for work she performed in 2016 and does not include $2,500 she billed in December for work performed in late 2017. In addition, Kimmie has an unpaid bill from a client for $2,200 for work she performed in 2015. This client has not been heard from since December 2015. Kimmie has tried to locate this individual to no avail. Kimmie feels certain that she will never collect the $2,200 she is owed. Her business expenses for 2017 are as follows: Wages $32,450 Meals (on perspective clients) 1,750 Office Expense 7,700 Advertising 2,125 Legal Fees 500 Utilities 3,578 Speeding Ticket 275 Rent 12,000 Health Insurance (this policy covers the whole family) 7,100 Business portion of Repairs, Gas and Oil on Toyota 1,550 In addition, Kimmie drove her 2013 Toyota (purchased on June 1, 2013) 1,925 miles to deliver accounting records to her clients. Kimmie does not know if she can take the standard mileage, actual cost allocated to the car or both. Kimmie drove the car a total of 11,750 miles in 2017. Kimmie utilized the following assets in her Tax Preparation business: Description Date Placed Adjusted Basis when Business of Property: into Service: Placed into Service: Use: Computer 7/1/14 $1,750 100% Printer 7 /7/15 2,750 100% Filing Cabinets 1/21/16 3,250 100% Laptop 2/9/17 2 ,510 100% Monitor 8/28/17 1,075 100% All of the assets listed above were purchased new by Kimmie on the date they were placed into service. For Assets placed in service in 2017, Kimmie elected the cost recovery method that yielded the highest possible cost recovery deduction method for that year. For assets purchased prior to 2017, all of these assets were depreciated under the MACRS method (None were depreciated under Section 179). For each year of acquisition, the highest possible deduction under MACRS was elected. Accordingly the expense method of 179 was not elected. No additional first year depreciation was taken in any year. 3. In November 2015 Kimmie was hit by a car while walking her dog. The driver of the car was at fault and Kimmie sued the driver for various damages. Kimmie spent some time in the hospital to recover from her injuries. The court case didnt start until September 2016 and in early 2017 Kimmie won the case. The driver of the car was determined to be at fault and Kimmie was award damages totaling $305,000. The damages awarded were $225,000 for personal injury, $5,000 for punitive damages against the driver and $75,000 for loss of income because her injuries prevented her from working for some time. 4. A. Kimmie did not sell any stock that was reported on Form 1099-B B. Kimmie also sold the following capital assets which are not reported on and Form 1099-B: 900 shares of Medals Corp. The shares were purchased by Kimmie for $1,793 on the New York Stock Exchange on January 5. The shares were sold on the New York Stock Exchange for $2,950 on December 5. 1,500 shares of The Savings Bank. These shares were distributed to Kimmie from the estate of Richard on July 28, 2016. The shares were worth $15,024 as of the date of Richard's death but were worth $16,250 on the date of distribution to Kimmie. Kimmie, acting as the executrix of Richard's estate did elect the alternate valuation method. Richard bought the shares for $11,095 on September 11, 2009. Kimmie sold the shares to an unrelated party on October 15 for $18,100. 725 shares of Running Wild Corporation. These shares were received by Kimmie as a gift from her aunt on November 7, 2010. Her aunt's basis in the stock at the time of the gift was $7,050. The fair market value of the stock at the time of the gift was $6,457. No gift tax was paid on the transfer. The shares were sold to an unrelated party on September 30 for $9,900. 5,850 shares of BRKLYN. The shares were purchased by Kimmie on March 17, 2011 for $2,500. During 2017, BRKLYN declared bankruptcy and liquidated. No assets were transferred to the shareholders during the liquidation. Kimmie has a long-term capital loss carryover of $1,750 from 2016 All of the capital assets listed above were held by the Kimmie for investment purposes. 5. In early 2017, Kimmie learned that her uncle, Jimmy Sullivan, who borrowed money to open a new business passed away. Kimmie loaned Jimmy $3,000 to help with the new business. Kimmie had him sign a note due in one year. Shortly after Kimmie loaned the money to Jimmy, he passed away. As of December 2017, Kimmie has been told that there will be no payment on the note and it is completely worthless. 6. Besides the items previously noted, the Kimmie had the following receipts for 2017: Interest income: City of Boston bonds $1,000 LG Corporate bonds 550 The Savings Bank 57 $ 1,607 Cash gifts from Kimmies parents 17,000 Federal income tax refund (2016 return) 1,978 Gambling Winnings 4,000 Kimmie was the beneficiary of a life insurance policy that her uncle purchased on his own life. Kimmies uncle passed away on April 2. Kimmie collected $80,000 from the life insurance policy on November 1. 7. In addition to the items already noted, the Kimmie had the following expenditures for 2017: Kimmies contribution to her Keogh Plan/SEP Plan $5,500 Gambling loss 6,060 Life insurance premiums 1,675 Medical and dental expenses for Kimmie 6,900 Medical expenses paid by Kimmie for Sarah 3,025 Taxes: Taxes on Real Estate $4,987 Ad valorem taxes on personal property 945 State and local sales taxes 2,200 8,132 Interest paid on VISA credit card during the year 1,750 Interest paid on Kimmies 2015 Ford 1,030 Principle payments on Kimmies 2015 Ford 2,450 Cash Contributions: Salvation Army (Massachusetts branch) 2,980 Charity located in Canada 400 Cash given to a local family 250 Massachusetts governors election campaign fund 175 3,805 The life insurance premiums relate to the universal life insurance policies that Kimmie owns. The first beneficiary on both policies is Kimmies daughter. Kimmie contributed to the governors campaign fund because she thinks his influence is key in getting business. In September 2017, the Massachusetts Department of Revenue audited Kimmies state income tax return for 2015. They were assessed additional state income tax of $890 for that year. Surprisingly, no interest was included in the assessment. Kimmies paid the taxes due promptly. 8. Kimmie house was burglarized on March 5 and a painting was stolen. The painting was worth $45,000. Kimmie bought the painting on April 15, 2012 for $20,000. The painting was never recovered. Insurance recovery was limited to $5,000. 9. Relevant Social Security numbers are as follows: Name and Social Security Number Joan Gibbler, SSN 123-45-6783, daughter of Kimmie. Born December 3, 1995. Full-time student at the University of Maine before graduating in May of 2017. Joan lives with Kimmie and Kimmie provided 60% of her support. Her income consisted of wages of $21,000. Danny Gibbler, SSN 123-45-6784, son of Kimmie. Born February 2, 1998. Danny works full time in a restaurant. Kimmie provides 70% of his support while Danny provides 20% and the balance came from other sources. Danny lives with Kimmie. His income consisted of wages of $25,000. Winnie Gibbler, SSN 123-45-6785, daughter of Kimmie. Born November 1, 1993. Full-time student at UVM before graduating in May of 2017. Continued her education full time at the UMass Medical School as a medical student. Kimmie provided 70 percent of her support. Her income consisted solely of $10,000 earned from a part-time job in the medical field. She did live with Kimmie for the year. Sarah Gibbler, SSN 123-45-6786, daughter of Kimmie. Born May 12, 2000. Full-time student at Boston High School. Kimmie provided 100 percent of her support. She earned no income. She lived with Kimmie for the year. Kimmie also supported the following person: Julianna Mason, mother of Kimmie, SSN 123-45-6787. Widow. Born October 8, 1938. Resided in Fort Meyers, Florida. Kimmie provided 85 percent of her total support. Her sole income consisted of $4,000 of pension income and $8,000 of Social Security benefits. J. Robert Paul, cousin of Kimmie, SSN 123-45-6788. Widower. Born February 29, 1960. Lived with Kimmie all year long. Kimmie provided 65 percent of his total support. His sole income consisted of $9,100 of wages from a part-time job. 10. Kimmie made the following deposits with the United States Treasury for their Federal income tax liability from their own personal checking account on the dates indicated: April 17, 2017 $500 June 15,2017 500 September 17, 2017 500 December 15,2017 500 11. All source documents for wages, dividends, stock sales and interest paid are at the end. These items are not reported in any of the information above. Ignore the year on the source documents and assume that they are all for the tax year 2017. Prepare the Federal income tax return with all supporting schedules and attachments for Kimmie for 2017. Specifically, submit the following completed forms with required schedules: Form 1040: U.S. Individual Income Tax Return Form 1040 Schedule A: Itemized Deductions Form 1040 Schedule B: Interest and Ordinary Dividends Form 1040 Schedule C: Profit and Loss from Business Form 1040 Schedule D: Capital Gains and Losses Form 1040 Schedule SE: Self-Employment Tax Form 4562: Depreciation and Amortization (For Schedule C) Form 4684: Casualties and Thefts Form 8949: Sales and Other Dispositions of Capital Assets