Prepare a tax return for the following scenarios provided using form 1040 and schedule C, a link to the proper tax forms will be included.

You have been asked to prepare a 2016 tax return for the Reed family. Sam A. Reed (your 7 digit UNO id # add 00, born 12/26/1970) and his wife, Sally M. Reed (234-11-5678, born 10/31/1973) have three children; Molly age 12 (224-33-4455), Chance, age 14 (244-44-5566) and Ann, age 19 (243-88-7788). They live at 1525 Canal Street, New Orleans, LA 70118. Do NOT calculate depreciation for alternative minimum tax.

Sam Reed is a pediatrician with his own practice, New Orleans Pediatrics ("NO Pediatrics "), which is located nearby at 1210 Oak St., New Orleans, LA 70118. NO Pediatrics uses the cash basis of accounting.

https://www.irs.gov/pub/irs-pdf/f1040.pdf

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

1. NO Pediatrics had the following transactions during 2016:

Service Revenue $ 725,000

Staff Salaries 190,000

Advertising 7,500

Office Rent 84,000

Insurance 74,000

Utilities 24,000

Meals & Entertainment 6,200

Dues& Subscriptions 4,000

Supplies 17,500

Travel Expenses 5,000

Legal Fees 9,000

Cell Phone (100% business) 3,700

Taxes and licenses 25,000

2. NO Pediatrics purchased $70,000 of furniture for business use on August 10, 2016. An election

is made to expense the acquisition cost under Section 179. The furniture has a 7 year life and

Sam wants to maximize the current year deduction.

3. The following property was acquired and placed in service in prior years:

Property Placed in service Property Class Cost Method

Computers March 2015 5 year $25,000 MACRS

Printers March 2015 5 year $10,000 MACRS

Equipment February 2015 7 year $105,000 MACRS

Section 179 or bonus depreciation was not elected for any of the property above.

4. Sally is a teacher at Haynes Academy. Her 2016 W-2 reported the following information:

Wages 58,000

Federal income tax withheld 8,700

State income tax withheld 2,000

Sally's job provided health insurance for the family.

5. Sam paid estimated federal income taxes of $36,000 ($9,000 for 4 quarters) and estimated state

income taxes of $6,000 ($2,000 for the first 3 quarters).

6. Sam and Sally received a Form1098-T from UNO showing they paid $4,000 in eligible

education expenses for Ann who is a full-time student in her first year at UNO.

7. Sam is still paying off his loans from medical school. He received Form 1098-E showing

that he paid $5,000 in student loan interest.

8. The Reeds donated 200 shares of ABC company stock to St. Jude's Children's Hospital on

May 15, 2016. The stock which had a basis of $15 per share and a FMV of $35 per share

was purchased in 2010. ABC is a publicly traded stock.

9. Sam and Sally had the following personal expenses for the year:

Home mortgage interest $21,000

Real estate taxes 10,000

Cash donations:

First Methodist Church 8,000

Humane Society 100

Red Cross of LA 200

UNO Dept. of Accounting 6,000

American Cancer Society 500

Medical Expenses:

Prescription medications unreimbursed 3,200

Doctor's bills unreimbursed 8,300

Insurance premiums for Sallys father 6,000

Wheelchair ramp for Sally's father 10,000

(added value to home: $3,000)

10. Sam and Sally provide 100% of the support for Sally's father, Mark West (222-44- 6666). He

resides in an assisted living facility. He spends every other weekend at the Reeds home.

11. Sam and Sally have the following investment income for 2016:

Chase Bank (1099-INT) $2,000 interest

Ameritrade (1099-DIV) $9,000 dividends (qualified)

New Orleans municipal bonds $1,000 interest

12. Sam and Sally had the following stock transactions during 2016. They received Form 1099-B.

Date Shares Selling Price Basis .

1/14 Sold 500 shares LAG $30/share Paid $20/share for 300 shares on 2/10/2011.

There was a 2 for 1 stock split on 10/6/2012.

6/30 Sold 300 shares RST $35/share Paid $45/share for 400 shares on 8/2/2015.

9/25 Sold 100 shares ATM $30/share Paid $20/share for 100 shares on 2/20/2016.

100 shares of General Motors stock purchased in 2008 for $2,000 became worthless in 2016.

13. Sam received $100,000 of life insurance proceeds when his mother passed away during the

year.

14. The Reeds home was damaged during an electrical fire on May 22, 2016. The adjusted basis

of the home before the fire was $650,000 . The FMV before the fire was $700,000 and the FMV

after the fire was $590,000. The insurance reimbursement was $75,000.