M E M O R A N D U M

Tax Return Assignment #3

To: Student

From: Kate Partner

Date: March 1, 2022

Subject: The Beckmans 2021 Tax Return

David and Victoria Beckman are married and plan to file a joint return. Their social security numbers are 777-23-7777 and 555-55-5555 respectively. Davids birthday is May 2, 1963 and Victorias is April 17, 1964. They live at 723 S. Beverly Hills Way, Eden, UT 84000. Victoria is an office manager at Spice Dental, a local Dentists office here in Ogden. David is the manager of Bend-it Soccer Shop which is owned by Galaxy Corporation, a California Corporation. Their Forms W-2 are included here.

The Beckmans have two children, both of whom are full-time college students, Brooklyn (born January 25, 1994, Social Security Number: 444-44-4444) and Romeo (born February 7, 1999, Social Security Number: 222-22-2222). The Beckmans provided more than half of their childrens support during 2021 and both Brooklyn and Romeo live at the Beckmans home, except when they are away at college. Brooklyn and Romeo both had summer jobs in 2021. Brooklyn earned $6,000 and Romeo earned $4,000.

During 2021, the Beckmans also provided 60% of the total support of Davids widower father, Edward A. Beckman (born March 6, 1934, Social Security Number: 888-88-8888). Edward lived alone and lived solely off the Beckmans support and his social security benefits. Sadly, Edward died in November of 2021 and David, Edwards only beneficiary under his life insurance policy, received proceeds of $800,000 on December 29, 2021.

The Beckmans had the following expenses relating to their personal residence during 2021:

Property Taxes $5,000

Interest on Home Mortgage $12,800

Utilities $4,100

The Beckmans incurred the following medical expenses in 2021:

Medical insurance premiums $4,500

Doctor bill for Edward paid in 2021 $7,600

Operation for Edward $8,500

Prescriptions for Edward $900

Hospital Expenses for Edward $3,500

Reimbursement from Insurance Company for hospital stay $3,600

Other relevant information:

• During 2021, the Beckmans attended a dinner dance sponsored by the Ogden Policemens Benevolent Orchestra (a qualified charitable organization). The Beckmans paid $300 for tickets, the fair market value of which would normally be $50.
• The Beckmans contributed $5,000 to the Ogden Episcopal Church. They also contributed used clothing (cost of $1,200, FMV $350) to the Salvation Army (capital gain property). All donations are supported by receipts and are in very good condition.
• The Beckmans contributed $120 to the Ogden Symphony Ballet. In exchange they received two box tickets to the Ballets annual performance of the Nutcracker worth $60 each.
• In 2021, the Beckmans received interest income of $2,750, which was reported on a Form 1099-INT from the Bank of Utah.
• The IRS calculator estimates that the Beckmans sales tax paid in 2021 was $1,200.
• The Beckmans paid no estimated Federal income tax. Neither David nor Victoria wishes to designate $3 to the Presidential Election Campaign Fund
• None involved here did transactions in crypto currency.

Please prepare the Beckmans 2021 tax return. If they have overpaid, they want the amount refunded to them. You will need the following tax forms: Form 1040, Schedule A, Schedule B. Please note that the credit for other dependents who are not qualifying children is $500 each.