Magdalena Schmitz has undergone some major changes in her life recently. In 2017, at the age of 46, her husband, Roger, passed away. Magdalena has not remarried as of the end of 2019. Magdalena currently lives on a naval air base as a naval officer. She was living in Pittsburgh when her husband passed away, but she moved back to her childhood home so she could get help from her family raising her children. Magdalena has three children (ages as of the end of the year): Alyssa (23), Tyler (16), and Connor (11).

Magdalena reported the following information:

• Magdalenas social security number is 294-83-2845

• Alyssas social security number is 824-84-8456

• Tylers social security number is 824-34-9584

• Connors social security number is 824-56-2984

Alyssa is unmarried and a full-time graduate student at Pennsylvania State University (PSU) (EIN 33-9876543). PSUs address is 1250 Happy Valley, State College, PA 16801. She received her bachelors degree the year her father passed away, 2017. Alyssa works part-time in State College to help with some of her living expenses and started graduate school. Alyssa earned $2,300 in gross income during the year and had her income tax return prepared on campus by Volunteer Income Tax Assistance (VITA) volunteers. Magdalena provided support for Alyssa including paying for rent, books, tuition, food, clothes, medicine, and other support items. In total, Magdalena provided $12,700 of support for the year. PSU provided Alyssa with a Form 1098-T at year end.

Alyssas higher education expenses for her university studies were as follows:

Tuition $6,500

Books $2,000

In order to permit Magdalena to maintain a full-time job, she sends Connor to a day care program after school five days a week. During the year, Magdalena paid the day care operator $4,250 for Connors care.

Magdalena incurred the following moving-related expenses during the year:

Transport of household items $3,200

Meals in transit 150

House hunting trip 1,350

In addition, she drove her car the 400 miles to the naval base as part of the move.

Magdalenas W-2s for the year reported the following:

Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
$48,435	$900	$700

Magdalenas employer withheld all applicable and appropriate payroll taxes. The entire Schmitz family was covered by minimum essential health insurance during each month in 2019. The insurance was provided by Magdalenas employers.

Magdalena also received the following during the year:

Life Insurance Payment-Mutual Life (Mothers passing) $150,000

Cash gift from her father $ 5,000

Interest income-First Bank of Bedford $ 310

Interest income-General Electric Bond $ 3,200

Interest income from U.S. Treasury Bond $ 350

Interest income-Bedford School District Municipal Bond $ 2,500

Interest income-Johnstown Rural Improvement District Bond $ 1,300 (municipal interest income)

Qualified dividend income from Abbott Labs $275

Qualified dividend income from 3M $350

Dividend income (not qualified) from China Fund $2,000

PA state income tax refund* $ 325

*Refund was from state tax she paid last year. Magdalena deducted all of her state taxes as itemized deductions, and received full tax benefit for the deductions, on her prior year federal tax return.

Magdalena paid or incurred the following expenses during the year:

Dentist (unreimbursed by insurance) $6,500

Doctors (unreimbursed by insurance) $4,475

Prescriptions (unreimbursed by insurance) $ 255

Real property taxes on residence $7,950

Mortgage interest on principal residence (Form 1098 received) $9,845

Contribution of stock to the American Lung Association $ 600 Basis; FMV at date of donation $800. Long-term

Contribution of land to the Habitat for Humanity $10,000 Basis; FMV $15,000. Long-term

Magdalena had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B. Basis information on each stock sale was reported to the IRS):

Sold 2,000 shares of Microsoft 7/1/19 $22,500

Sold 75 shares of Apple, Inc. 4/15/19 $28,750

Sold 350 shares of Cooper Tire 10/14/19 $14,700

Sold 1,000 shares of Cardinal Health 11/10/19 $3,500

Relevant tax basis/holding period information related to sales of securities in the current year:

Purchased 2,000 shares of Microsoft on 8/1/18 for $21,000

Purchased 200 shares of Apple, Inc. on 3/8/14 for $40,000

Purchased 350 shares of Cooper Tire on 1/12/13 for $9,000

Received 1,000 shares of Cardinal Health from Magdalenas father as a gift on 10/10/00. Her fathers basis in the stock at the time of the gift was $7,000. Fair market value of the stock at the date of the gift was $5,000

Magdalena has a $3,000 long-term capital loss carryover from the prior tax year.

Please complete Form 1040 in its entirety (down to the amount owed or the amount to be refunded) and Schedule A. Please complete a handwritten Schedule D, with the remainder of the supporting calculations. Please show all calculations on a separate piece of paper and document the calculation of the tax liability in the space immediately below these instructions (in the space, where indicated); you must use this box to show your calculation of the tax liability or you will not earn credit on this portion of the assignment.