Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda owns her own business (an S-Corp). They file a joint return. Personal items: Wages / Salaries $115,000 (Includes both Lance and Wanda) Interest Income 1,100 Child support payments to John Allen 9,000 Alimony payments to John Allen 20,000 Lottery winnings 870 Federal income tax withholding 12,000 State income tax withheld 5,000 Wanda was previously married to John Allen, they divorced several years ago (prior to 2018). Under the divorce decree, Wanda was obligated to pay alimony and child support to John. She paid him $20,000 in alimony and $9,000 in child support, which agreed with the divorce decree. Wanda is the owner of her own business. Throughout the year she earned $36,000 of ordinary income from this business (taxed as an S-Corp), reported on a K-1. Additionally, Lance and Wanda had: (1) Sale of LMN publically traded stock on 2/15/2022 for $5,000 (originally purchased for $10,000 on 8/15/2021) (3000) (2) Sale of QRS publically traded stock on 10/15/2022 for $19,000 (originally purchased for $8,500 on 12/15/2020) gain 10500 (3) Sale of a boat on 5/15/2022 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2017) nontaxable (4) Wanda inherited publically traded stock worth $30,000 from a deceased uncle on September 30, 2022 (5) Immediately after receiving this stock, Wanda sold it for $30,000. This stock was originally purchased by his uncle on January 15th, 2019, for $23,000 - nontaxable Prepare the 2022 Federal income tax return for Lance and Wanda Dean. This is a group assignment. It is required that you submit both the (1) tax return and a (2) brief explanation for line items on the return. Please submit the following forms 4 items: (1) Cover page with your name and section #, (2) 1040, (3) Schedule 1, and (4) a written explanation for each line item by form/schedule. The written explanation should be focused on calculations and explanations. I dont need a list of every single line, just lines with calculations. Make sure the explanations match the numbers on the actual forms, if they do not, I will deduct points. Normally, this tax return would require additional forms including schedule D, E, and form 8995. I do not want these additional forms prepared; I only want the forms listed above. These additional forms would include the information that I expect to have in the explanations write-up (i.e. calculations, explanations, justifications, etc.). Hints: 1) Gambling winnings are reported on Schedule 1, line 8b. 2) The income from Wandas business will be reported on Schedule 1 line 5. 3) Capital gains/losses are reported on form 1040 line 7. Make sure to include a calculation. 4) The taxpayer owes money (i.e., does not have a tax refund). There should be something on line 37 Form 1040. 5) Assume the taxpayers have adequate health insurance (i.e. ignore any health insurance items on the returns). 6) Do not forget the Qualified Business Income Deduction, line 13 form 1040. Assume Wanda qualifies for this deduction. In Chapter 15, we can discuss the rules in more detail. Assume that the QBID is a deduction equal to 20% of Qualified Business Income (QBI). With QBI being equal to Schedule 1 line 5. 7) Take the standard deduction 8) S corps are not subject to Self-Employment Tax. 9) Dont forget to check the box for filing status (Single, MFJ, HOH, or MFS). 10) We are not preparing any state tax returns. 11) Make sure your written explanation includes a brief write-up on all of the additional items. That is, make sure to explain items #1 through #5 12) Make sure to show the calculation (i.e., the formula) for important items. Such as the calculation of capital gains/losses and the calculation of tax.

Please use forms 1040 and give details on each calculation