prepare the tax return in 1040 format

Milo and Mila Mudblood are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2019. The Mudbloods live at 1121 College Avenue, Carmel, IN 46032. Milo is an assistant manager at Gringotts Bank, and Mila is a professor at Hogwarts. They present you with W-2 forms that reflect the following information: Milo Mila Salary Federal tax withheld State income tax withheld FICA (Social Security and Medicare) withheld Social Security numbers $68,000 6,770 1,400 5,202 111-11-1112 $56,000 6,630 1,100 4,284 123-45-6789 Mila is the custodial parent of two children from a previous marriage who reside with the Mudbloods throughout the school year. The children, Harry and Hermione Weasley, reside with their father, Arthur during the summer. Relevant information for the children follows: Harry Hermione Age Social Security numbers 123-45-6788 123-45-6787 Months spent with Mudbloods Under the divorce decree, Arthur pays child support of $150 per month per child during the nine months the children live with the Mudbloods. Arthur says that he spends $200 per month per child during the three summer months they reside with him. Mila and Milo can document that they provide $2,000 support per child per year. The divorce decree is silent as to which parent can claim the exemptions for the children. In August. Milo and Mila added a suite to their home to provide more comfortable accommodations for Margaret Snyder (123-45-6786), Mila's mother, who had moved in with them in February 2018 after the death of Mila's father. Not wanting to borrow money for this addition, Milo sold 300 shares of Acme Corporation stock for $50 per share on May 3, 2019, and used the proceeds of $15,000 to cover construction costs. The Mudbloods had purchased the stock on April 29, 2014, for $25 per share. They received dividends of $750 on the jointly owned stock a month before the sale. Margaret, who is 66 years old, received $7,500 in Social Security benefits during the year, of which she gave the Mudbloods $2,000 to use toward household expenses and deposited the remainder in her personal savings account. The Mudbloods determine that they have spent $2,500 of their own money for food, clothing medical expenses, and other items for Margaret. They do not know what the rental value of Margaret's suite would be, but they estimate it would be at least $300 per month Interest paid during the year included the following $7,890 Home mortgage interest (paid to Carmel Federal Savines & Loan) Interest on an automobile loan (paid to Carmel National Bank) Interest on Citibank Visa card 1,660 620 In July, Milo hit a submerged rock while boating. Fortunately, he was uninjured after being thrown from the boat and landing in deep water. However, the boat, which was uninsured, was destroyed. Milo had paid $25,000 for the boat in June 2018, and its value was appraised at $18,000 on the date of the accident The Mudbloods paid doctor and hospital bills of $12,700 and were reimbursed $2,000 by their insurance company. They spent $640 for prescription drugs and medicines and 85,904 for premiums on their health insurance policy. They have filed additional claims of $1,200 with their insurance company and have been told they will receive payment for that amount in January 2020. Included in the amounts paid for doctor and hospital bills were payments of $380 for Margaret and $850 for the children. Additional information of potential tax consequence follows: $6,850 1,379 Real estate taxes paid Sales taxes paid (per table) Contributions to church Appraised value of books donated to public library Refund of state income tax for 2018 (the Mudbloods itemized on their 2018 Federal tax return, and their total state and local taxes were less than $10,000) 4,600 740 1,520 Directions and deliverable: Compute net tax payable or refund due for the Mudbloods for 2019. Prepare the tax return and all applicable schedules for the Mudblood family, Please use only the blank forms provided in the course materials folder. Milo and Mila Mudblood are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2019. The Mudbloods live at 1121 College Avenue, Carmel, IN 46032. Milo is an assistant manager at Gringotts Bank, and Mila is a professor at Hogwarts. They present you with W-2 forms that reflect the following information: Milo Mila Salary Federal tax withheld State income tax withheld FICA (Social Security and Medicare) withheld Social Security numbers $68,000 6,770 1,400 5,202 111-11-1112 $56,000 6,630 1,100 4,284 123-45-6789 Mila is the custodial parent of two children from a previous marriage who reside with the Mudbloods throughout the school year. The children, Harry and Hermione Weasley, reside with their father, Arthur during the summer. Relevant information for the children follows: Harry Hermione Age Social Security numbers 123-45-6788 123-45-6787 Months spent with Mudbloods Under the divorce decree, Arthur pays child support of $150 per month per child during the nine months the children live with the Mudbloods. Arthur says that he spends $200 per month per child during the three summer months they reside with him. Mila and Milo can document that they provide $2,000 support per child per year. The divorce decree is silent as to which parent can claim the exemptions for the children. In August. Milo and Mila added a suite to their home to provide more comfortable accommodations for Margaret Snyder (123-45-6786), Mila's mother, who had moved in with them in February 2018 after the death of Mila's father. Not wanting to borrow money for this addition, Milo sold 300 shares of Acme Corporation stock for $50 per share on May 3, 2019, and used the proceeds of $15,000 to cover construction costs. The Mudbloods had purchased the stock on April 29, 2014, for $25 per share. They received dividends of $750 on the jointly owned stock a month before the sale. Margaret, who is 66 years old, received $7,500 in Social Security benefits during the year, of which she gave the Mudbloods $2,000 to use toward household expenses and deposited the remainder in her personal savings account. The Mudbloods determine that they have spent $2,500 of their own money for food, clothing medical expenses, and other items for Margaret. They do not know what the rental value of Margaret's suite would be, but they estimate it would be at least $300 per month Interest paid during the year included the following $7,890 Home mortgage interest (paid to Carmel Federal Savines & Loan) Interest on an automobile loan (paid to Carmel National Bank) Interest on Citibank Visa card 1,660 620 In July, Milo hit a submerged rock while boating. Fortunately, he was uninjured after being thrown from the boat and landing in deep water. However, the boat, which was uninsured, was destroyed. Milo had paid $25,000 for the boat in June 2018, and its value was appraised at $18,000 on the date of the accident The Mudbloods paid doctor and hospital bills of $12,700 and were reimbursed $2,000 by their insurance company. They spent $640 for prescription drugs and medicines and 85,904 for premiums on their health insurance policy. They have filed additional claims of $1,200 with their insurance company and have been told they will receive payment for that amount in January 2020. Included in the amounts paid for doctor and hospital bills were payments of $380 for Margaret and $850 for the children. Additional information of potential tax consequence follows: $6,850 1,379 Real estate taxes paid Sales taxes paid (per table) Contributions to church Appraised value of books donated to public library Refund of state income tax for 2018 (the Mudbloods itemized on their 2018 Federal tax return, and their total state and local taxes were less than $10,000) 4,600 740 1,520 Directions and deliverable: Compute net tax payable or refund due for the Mudbloods for 2019. Prepare the tax return and all applicable schedules for the Mudblood family, Please use only the blank forms provided in the course materials folder