PREPARE FORM 1040. This project include two part; The part 1 is the file attach below (include schedule A, B, D, FORM 8949; FORM 8243); for part 2, my instructor just tries to add some additional information which the same client in part 1, please help me in part two (==> Which form need for each line in Practice set #2 in order to complete form 1040. If you have no experience about prepare tax return, please keep the question for the one who can do it; do not ask a question like NEED MORE INFORMATION or QUESTION IS TOO LONG; The information is very clear, so just use the information of that client to prepair for form 1040; If you have any question, please detail it instead of comment like "NEED MORE INFORMATION". Please someone know how to prepare tax return, help me to add addional information in part #2 in my attach form. THANK YOU

Practice set #1: Eric Amoth (Social Security Number 551-11-1111) is 50 years old and married to Mary Amoth, age 34, (Social Security Number 552-45-6789). Formerly, Mary was Erics secretary but quit work to raise their children. They live at 1313 Mockingbird Lane, Mockingbird Heights, CA 92506. They file a joint return and have two dependent children, Anakin, age 13 and Rey, age 14. Anakins social security number is 551-45-6888 and Reys social security number is 552-45- 6777. Neither is interested in helping to fund the Presidential Election Campaign Fund. Eric and Mary come to you for help with the preparation of their 2019 tax return and have provided the details for the following transactions: (married filed jointly with two dependent; they got $4,000 children tax credit (line 13, form 1040;)

• Eric received $200,000 in salary from Red Steel Corporation, where he is a construction engineer. Federal withholding was $37,750 and the appropriate FICA and Medicare withholding was done. CA withholding was $15,100. (200,000 - wage from w2 - line 1 form 1040; 37,750 - income withold form w2 and 1099, line 17 form 1040; 15,100 line 5a -schedule A).
• Erics mother passed away 6/22/2018. He received a parcel of land worth $50,000 on 6/22/2019, no alternative valuation date was elected. He sold the land on 12/24/2019 for $50,600. He also received life insurance proceeds in the amount of $150,000. He invested a portion of the proceeds from the sale into Disney stock for his three children. The value of the Disney stock at the time of purchase was $10,000 per child. (for this one, only 600 gain by selling the land included in his income tax return, amount he received form life insurance and purchase stock for his child not include in his income tax return; amount $600 consider as long-term gain and show on form 8949; line 10; 15; 16 schedule D and line 6- form 1040)
• Eric and Mary received $10,400 from Los Angeles school district bonds. (line 2a - tax-exempt form 1040)
• Eric received $5,300 interest from a Merrill Lynch money market account. (schedule B and line 2b form 1040)
• The Amoths gave to the Goodwill items with a FMV of $650. They provided the receipt for the household goods donated on 7/15. The goodwill is the local one in Mockingbird Heights at 123 High Street. show on form 8283 (h) ; schedule A, line 12, 14)
• The Amoths own their home. They provided to you a Form 1098 with the mortgage interest paid by them to Rocket Mortgage. The total interest was $14,000. Additionally, the property taxes were impounded by Rocket Mortgagee and were $4,500 for the year (14,000 -line 8a - scheducle A; 4,500 line 5b; schedule A)
• Schedule A include : line 5a - 15,100; line 5b- 4,500; line 5d - 19,600; line 5e - 10,000; line 7 - 10,000; line 8a, 8e, 10 - 14,000 line 12, 14 - 650 ==> total item deduction 24,650 ==> show on line 9 - form 1040; for Eric income tax 2019, item deduction > standard deduction --> use item deduction.
• I'm not sure that if we add additional information on practice set #2; there is any change for total item deduction on Schedule A.

Practice set #2: UPDATE FOR CASE ABOVE (Please help in this part like continue to fill out in my attach form to complete FORM 1040 for this Client, Eric). Thanks so much.

- Eric and Mary incurred unreimbursed medical expense of $25,500 for Rey's hospitalization during the year.

-Eric contributed $750 to the campagin of Fred Munster for Mayor of Mockingbird Heights.

-Eric and Mary qualified dividend income form Ford. of $15,000 and non-quialified dividend income of $7,500 from Global, Inc.

-Eric and Mary also had Treasury Bond Interest of $15,000.

-Mary started a business in 2019. A summary of the activity is attached. The business is SMLLC. Do not complete the CA return. Mary elects to use the cash basis of accounting and maintains no inventory.

Mary's Craft - Made to Order - Summary acitvity for ending December 31 2019

Sales Revenue ............................................(850,000)

COGS ...................................................475,000

Salary and Wages - paid to others..................175,000

Rent .......................................................45,000

Utilities ....................................................10,000

Telephone ...............................................6,700

Advertising ................................................3,000

Entertainment ...................................................5,500

Contributions to State Senate's Campaign ........5,000

Meals ..............................................................15,000

Accounting and Legal Fees .............................40,000...........Note the accounting and legal fess includes: $10,000 related to the purchase of another craft business and $15,000 to look into a restaurant that has not successful.

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