please help me with my homework questions. Please show calculation and how you get the answers. Thanks!

2020 Return

Darren and Samantha Stevens want you to complete their 2020 tax return.

Darren, (Soc Sec # 320 38 6678) age 34, is a self-employed marketing consultant who owns a business next to a large tobacco company office building. His wife Samantha, (666 66 6666) age 31, teaches white magic at a local language school. They have 3 children - Tabitha, age 8; Isaac age 6; and Mira age 3. You have the social security numbers for each of them. They live at 246 White Bread Drive, Suburbia, MN, 56666.

The children are cared for by Samantha's mother Endora, at no charge. She just loves those kids.

They paid $8,900 in mortgage interest according to their 1098. It is a first mortgage secured by their home. The original balance on the mortgage was about $150,000. They paid $1,200 in real estate taxes for their home and $1,200 in property taxes for their raw land up north. They pay $3,500 for property taxes on their rental building (see below). They pay $1,000 for property taxes on their small farm (see below). They have billing statements for all the property taxes.

They also made charitable contributions of $4,000 cash to their place of worship according to the receipt from the charity. You have the address for the place of worship. They made a contribution of IBM stock to the Salvation Army and of course have a receipt from Salvation Army The broker sent receipts to the Stevens. The IBM stock was purchased 3 years ago for $7,800, and was worth $9,550 on the date of the gift, May 30.

They also donated good clothes worth about $50 to Goodwill, according to the receipt from Goodwill.

Samantha and Darren earned interest (on money market accounts) of $3,200 according to 1099s. They have no money overseas. They received $1,500 of municipal bond interest. The 1099 reflects that it is federal tax exempt.

Each of the children received a $20,000 inheritance from Samantha's father's estate at the end of the year. Each of the children received about $17 of interest according to the 1099s received from the estate.

They sold their car to Samantha's sister on June 28 for $5,000. They purchased it May 17, 2008 for $17,000.

According to the W-2 box 1 and 3 Samantha's salary for the year is $32,000, from which $3,000 in federal income tax and $1,400 in state income tax were withheld. She had $2,448 withheld for FICA. Samantha receives medical and dental insurance benefits from her employer in the amount of $3,600 of premiums paid by the employer. They paid an additional $2,400 in medical and dental insurance premiums themselves out of their checkbook.

They had $580 of out of pocket medical and prescription expenses, according to receipts.

Darren is self-employed, so he has no W-2 (see below). He paid $40,000 in federal estimated taxes this year, and $3,000 in state estimated taxes this year.

According to the 1099DIV, they have total dividend income of $2,000 in box 1a and in box 1b of the 1099DIV, all from American Motors stock they have held for years.

They have no interest in any foreign bank or financial institution.

According to their broker's 1099-B, all the bases for these stocks are show in box 3 of the 1099Bs:

Short term according to the broker:

They bought 100 shares Eastman Kodak stock in February 12 this year for $10,000, and sold it for $8,500 in April 12 this year after it was taken off the DJIA.

They sold100 shares Tetratel stock November 28 this year for $25,556. They received Tetratel from the estate of Samantha's father who died November 13 this year when it was worth $24,400. He purchased it for $10,000 August 23, 1998.

Long Term:

They sold 100 shares of GM stock for $256 on May 10 this year. They purchased the stock for $15,000 on March 23, 2001.

They sold 100 shares Altria stock for $15,000 October 15 this year. They purchased it for $1,200 June 16, 1990.

They did not receive a 1099 for the following sale:

They sold 40 acres of land up north for $25,000 cash (check) on October 21. There was no commission. They received it as a wedding gift October 10, 1994 from Samantha's parents. It was worth $20,000 on the date of the gift, and Samantha's parents bought it in 1970 for $12,000.

They purchased 100 shares Pfizer stock April 12 this year for $8,500, and it was worth $11,334 on December 31 this year. They still have the Pfizer stock.

(HINT: the directions for 8948 are in the Instructions for Form 8949)

According to the K-1 from Samantha's father's estate, Samantha received $3,000 of passive income from her father's estate (John Wormwood Estate) November 1. According to a K-1 from the partnership, Samantha also received her proportionate share of a loss from the Screwtape L.P. [ a limited partnership interest she inherited from her father] in the amount of ($2,500) passive loss. Neither of these items comes from a qualified trade or business. Do not worry about the form 8582. The limited partnership will provide you with it.

Samantha bought one scratch-off game this year, and it paid out $50,000 (but $10,000 was withheld for federal taxes, and $1,000 withheld for state taxes).

Darren is self-employed, and has been in business for 4 years. He is a marketing consultant, code 541910, "Darren Stevens Consulting". He uses the cash method of accounting. During the current year, Darren recorded the following items of income:

Revenue from clients $300,225

The following expenses were recorded on the office books. The office is located at 400 Tobacco Pocket, Urbana MN 56667

Malpractice and casualty/renter's insurance 37,500

Long distance/cell phone/internet/cable 600

Office staff salaries, gross 51,000

Employer's share of FICA 3,902

Employees' share of FICA 3,902

Employee's Fed W/H on staff salaries 5,100

Employee's State W/H on staff salaries 1,500

Office Rent payments 15,000

Office magazine subscriptions 150

Office supplies 24,000

Marketing journals 330

Uncollectible receivables written off 2,500

Freelance artists 32,000

Legal and other services 12,000

Darren filed all appropriate 1099s and W-2s. Darren does not provide any health insurance for his employees, nor does he have a health insurance plan through his business.

Samantha owns and operates a barley and hop farm on the outskirts of town. Her Crop production activity code is 111900. She has no employees and does all the work herself. She is not required to file and 1099s.

These commodities have risen in price as a result of the demand by Granite City Food and Brew, so they sell every last ounce every fall, then buy seed and shoots for planting in the spring. She has been profitable for 3 years running. The seed and shoots cost $500 for the year, and they sold produce for $10,600 plus $550 of honey this year. They also have the following expenses: fertilizer $1,100, electricity $770, insurance $235, equipment repairs $960, fumigation services $1,200, $1,000 property taxes (already mentioned) and $3,600 custom hired help during harvest . She has $125 of ACRS depreciation and $262 of MACRS depreciation this year for equipment placed in service in previous years. TIP: use form 4562 page 1 to report this depreciation.

Darren owns a building (at 200 Tobacco Road, Urbana, MN) rents it out under a commercial lease for the whole year, for part of the building. The commercial tenant pays its own share of maintenance and utilities. The tenant pays Darren $2,400 per month for the space. The Tenant also paid Darren $1,125 in October for the tenant's share of taxes. Darren's property taxes for the whole rental building is $3,500 (already mentioned) but Darren has not rented out the whole building. Most of the building is unoccupied. Darren has been trying to rent it out since then, by listing it, advertising it and by signage. The utilities and phone to the 1600 square feet are separately metered, so the tenant pays those amounts directly to Charter and Xcel. The tenant is responsible for its own janitorial and maintenance fees. According to your depreciation schedules, this year's depreciation is $7,692 MACRS. Use form 4562 page 1 to properly report the depreciation. Darren works 300 hours per year managing this rental business.

Darren's additional rental expenses are:

Mortgage interest 10,000

Utilities 3,750

Maintenance and janitorial 3,000

Insurance 1,000

He filed all required 1099s.

Don't worry about Alternative Minimum Tax

AGI= $_____________________

$ ___________ refund/tax due