Question
Note: This problem is for the 2020 tax year. Robert A. Kliesh, age 41, is single and has no dependents. Robert's Social Security number is
Note: This problem is for the 2020 tax year.
Robert A. Kliesh, age 41, is single and has no dependents. Robert's Social Security number is 111-11-1115. His address is 727 Big Horn Avenue, Sheridan, WY 82801. He does not contribute to the Presidential Election Campaign fund through the Form 1040.
Robert works as a financial analyst and is well regarded in his field. This year his salary totaled $1,250,000. His professional success has allowed him to purchase investments in real estate and corporate stocks and bonds. He also spends time volunteering with various organizations that help people develop financial literacy skills.
Examination of Robert's financial records provides the following information for 2020.
a. | On January 16, 2020, Robert sold 1,000 shares of stock for a loss of $12,000. The stock was acquired 14 months ago for $17,000 and sold for $5,000. On February 15, 2020, he sold 400 shares of stock for a gain of $13,100. That stock was acquired in 2012 for $6,000 and sold for $19,100. | |
b. | He received $100,000 of interest on private activity bonds that he had purchased in 2016. He also received $40,000 of interest on tax-exempt bonds that are not private activity bonds. | |
c. | Robert received gross rent income of $190,000 from an apartment complex he owns. He qualifies as an active participant in the activity. The property is located at 355 North Milward, Jackson, WY 83001. | |
d. | Expenses related to the apartment complex, acquired in 2011, were $225,000. | |
e. | Robert earns no taxable interest income. Because he invests only in growth stocks, he receives no dividend income. | |
f. | He won $60,000 in the Wyoming lottery. | |
g. | Robert was the beneficiary of an $800,000 life insurance policy on the life of his uncle Jake. He received the proceeds in October. | |
h. | In February, Robert exercised an incentive stock option that was granted by his employer in 2017. The strike price of the option was $5 per share. On the date of exercise, the fair market value of the stock was $175 per share. Robert purchased 1,800 shares with the option; as of the end of the year, he still owns the stock (current FMV $138 per share). | |
i. | Robert incurred the following potential itemized deductions.
| |
Robert's W-2 shows Federal income tax withheld of $420,000 and Medicare tax withheld of $27,525. Robert also made estimated Federal income tax payments of $35,000. Robert did not engage in any virtual currency transactions, and he was covered by health insurance for the entire tax year. Additionally, he did not qualify for any coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. |
Use Forms 1040, 6251, 8582, 8960, and 8959 as well as Schedules 1, 2, 3, A, D, E and the Qualified Dividends and Capital Gain Tax Worksheet to compute the tax liability (including AMT) for Robert A. Kliesh for 2020. Omit Forms 8283 and 8949.
Specifically - I need help completing Schedule A, and Form 6251 and Form 8959.
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