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Please help me find the 2020 federal individual income tax return. Use Form 1040, 8949. Tax Return Problem (75 points) Tom and Jan Smith, a
Please help me find the 2020 federal individual income tax return. Use Form 1040, 8949.
Tax Return Problem (75 points) Tom and Jan Smith, a married couple, engaged you to prepare their 2020 individual income tax return. Their address is 123 Main Street, Wilmore, KY, 40390. Their social security numbers and dates of birth are as follows: Tom Jan S. S. No. 123-45-6789 098-76-5432 Date of Birth December 1, 1956 May 5, 1958 They provide you with the following income and expense information for 2020: Tom is a tax attorney and his salary was $175,000. He had $19,000 in federal income taxes withheld, $7,000 in state income taxes withheld, and $4,000 in local income taxes withheld. Jan retired in July of 2020 and began receiving $1,500 per month for life from a pension. Jan's cost in the pension is $150,000. Tom and Jan also have rental property. The net rental income for the year is $20,000. (Do not prepare schedule E for this tax return.) During 2020, they received $155 in interest on their savings account and $200 from a municipal bond. They received $3,000 in ordinary dividends. Tom paid $1,000 per month in alimony from a divorce that was settled in 2012. The recipient's social security number is 765-89-1234. They have the following medical expenses for the year: o Prescription drugs - $125 o Doctor visit copays - $200 o Physical therapy for an injury - $300 New eyeglasses for Jan - $75 o Dental work - $150 They paid $2,000 with their 2019 Kentucky individual income tax return. They filed the return and made the payment in 2020. Tom and Jan paid $3,250 in real estate property taxes on their home and $600 in property taxes on their vehicles. The outstanding mortgage on their home is $450,000. Tom and Jan also paid $2,500 in real estate property taxes for a vacation home in Oregon. The outstanding mortgage on the vacation home is $225,000. The mortgage interest paid on the primary residence during 2020 was $5,684. The mortgage interest paid on the vacation home during 2020 was $3,250. They paid $250 in credit card interest during 2020. They provide you with the following list of contributions made during the year: o $6,000 to their church o $1,250 to The Salvation Army o $1,000 to Asbury University o $250 to the local humane society Tom provides volunteer service as an attorney to their church. He claims he provided 100 hours in volunteer service during the year. His billing rate is $150 per hour. 3 Tom and Jan also sold stock during the year. They provide you with the following stock sale information and a 2019 capital loss carryforward worksheet. All stock sales are reported on Form 1099-B showing basis. ABC, Inc. was original purchased on January 31, 2020, for $6,250. It was sold on December 15, 2020, for $3,275. XYZ, Inc. was also sold on December 15, 2020. It was sold for $4,250 and originally purchased on January 15, 2020, for $5,273. The following stock were sold on December 1, 2020: O DEF, Inc. sold for $5,234. Originally purchased on February 2, 2012 for $3,575. o UVW, Inc. sold for $1,254. Originally purchased on July 5, 2016 for $2,525. OGHI, Inc. sold for $4,205. Originally purchased on May 1, 2015 for $2,500. Required: Using the above information, prepare Tom and Jan's 2020 federal individual income tax return. Include all necessary schedules, forms, and worksheets. 4 Tax Return Problem (75 points) Tom and Jan Smith, a married couple, engaged you to prepare their 2020 individual income tax return. Their address is 123 Main Street, Wilmore, KY, 40390. Their social security numbers and dates of birth are as follows: Tom Jan S. S. No. 123-45-6789 098-76-5432 Date of Birth December 1, 1956 May 5, 1958 They provide you with the following income and expense information for 2020: Tom is a tax attorney and his salary was $175,000. He had $19,000 in federal income taxes withheld, $7,000 in state income taxes withheld, and $4,000 in local income taxes withheld. Jan retired in July of 2020 and began receiving $1,500 per month for life from a pension. Jan's cost in the pension is $150,000. Tom and Jan also have rental property. The net rental income for the year is $20,000. (Do not prepare schedule E for this tax return.) During 2020, they received $155 in interest on their savings account and $200 from a municipal bond. They received $3,000 in ordinary dividends. Tom paid $1,000 per month in alimony from a divorce that was settled in 2012. The recipient's social security number is 765-89-1234. They have the following medical expenses for the year: o Prescription drugs - $125 o Doctor visit copays - $200 o Physical therapy for an injury - $300 New eyeglasses for Jan - $75 o Dental work - $150 They paid $2,000 with their 2019 Kentucky individual income tax return. They filed the return and made the payment in 2020. Tom and Jan paid $3,250 in real estate property taxes on their home and $600 in property taxes on their vehicles. The outstanding mortgage on their home is $450,000. Tom and Jan also paid $2,500 in real estate property taxes for a vacation home in Oregon. The outstanding mortgage on the vacation home is $225,000. The mortgage interest paid on the primary residence during 2020 was $5,684. The mortgage interest paid on the vacation home during 2020 was $3,250. They paid $250 in credit card interest during 2020. They provide you with the following list of contributions made during the year: o $6,000 to their church o $1,250 to The Salvation Army o $1,000 to Asbury University o $250 to the local humane society Tom provides volunteer service as an attorney to their church. He claims he provided 100 hours in volunteer service during the year. His billing rate is $150 per hour. 3 Tom and Jan also sold stock during the year. They provide you with the following stock sale information and a 2019 capital loss carryforward worksheet. All stock sales are reported on Form 1099-B showing basis. ABC, Inc. was original purchased on January 31, 2020, for $6,250. It was sold on December 15, 2020, for $3,275. XYZ, Inc. was also sold on December 15, 2020. It was sold for $4,250 and originally purchased on January 15, 2020, for $5,273. The following stock were sold on December 1, 2020: O DEF, Inc. sold for $5,234. Originally purchased on February 2, 2012 for $3,575. o UVW, Inc. sold for $1,254. Originally purchased on July 5, 2016 for $2,525. OGHI, Inc. sold for $4,205. Originally purchased on May 1, 2015 for $2,500. Required: Using the above information, prepare Tom and Jan's 2020 federal individual income tax return. Include all necessary schedules, forms, and worksheets. 4
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