Question Content Area

Comprehensive Problem $4-1$

Theodore E$.$ Lariat is a single taxpayer born on September $22,1975.$ He was appointed the new coach of the Nashville Country Stars soccer team in January $2023.$ His address, Social Security number, and wages are reported on his Form W$-2($see separate tab$).$

Theodore was previously the coach at a different soccer club in a different state. He sold his previous home before moving to Nashville $($see $1099-$S below$).$ His only selling expense was sales commissions of $$27,790.$ His basis in the home was $$400,000.$ Theodore purchased his previous home on January $5,2022,$ and sold it on January $6,2023.$ Obviously, he would not have sold the home if it were not for the new job. He is currently renting the home he lives in$.$

$$ CORRECTED $($if checked$)$

FILER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone number

Troy Title and Escrow, Inc.

$40700$ Woodward Ave #$150$

Bloomfield Hills, MI $483041$ Date of closing

$01/06/2023$ OMB No$.1545-0997$

Form $1099-$S

$($Rev$.$ January $2022)$ Proceeds From Real Estate Transactions

$2$ Gross proceeds

$ $555,790\mathrm{.}00$ For calendar year

$2023$

FILER'S TIN TRANSFEROR'S TIN $3$ Address $($including city, state, and ZIP code$)$ or legal description

$8383$ Livernois Rd$,$ Troy, MI $48083$ Copy B

For Transferor

This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.

$45-1331787775-89-9532$

TRANSFEROR$$S name

Theodore E$.$ Lariat

Street address $($including apt. no$.)$

$140$ Whitsett Rd$.$

City or town, state or province, country, and ZIP or foreign postal code

Nashville, TN $37210$

$4$ Transferor received or will receive property or services as part of the consideration $($if checked$)......................$

$5$ If checked, transferor is a foreign person $($nonresident alien, foreign partnership, foreign estate, or foreign trust$)...........$

Account number $($see instructions$)6$

$ Buyer's part of real estate tax

Form $1099-$S $($Rev$.1-2022)($keep for your records$)$ www$.$irs.gov$/$Form$1099$S Department of the Treasury $-$ Internal Revenue Service

Theodore was welcomed back to the Nashville area as he was formerly a star player on the Country Stars team. During his playing time, he had purchased a modest home in Nashville but did not sell it$,$ instead choosing to rent the home over the years. His rental home is located at $2300$ Bransford Ave., Nashville, TN $37204$ and was rented all year to his tenant. The tenant occupied the home on January $1,2023,$ and pays rent of $$1,500$ per month for each month of $2023($the lease is a two$-$year lease$)$; however, Theodore required first and last months$$ rent and a security deposit of $$500$ and all were paid on January $1,2023.$ Theodore$$s rental expenses for the year are:

Mortgage interest $$16,000$

Real estate taxes $10,000$

Insurance $3,000$

Depreciation $($fully depreciated$)0$

Repairs $1,000$

Lawn and other maintenance $3,000$

Now that Theodore is back in Nashville, he actively manages the rental home. He probably spends about ten hours per month on the rental.

Theodore received a $1099-$B from his broker $($see separate tab$).$

Required:

Complete Theodore$$s federal tax return for $2023.$ Determine if Form $8949$ and Schedule D are required. If so$,$ use those forms and Form $1040,$ Schedule E $($page $1$ only$),$ and Form $8582($page $1$ only$)$ to complete this tax return. Do not complete Form $4562$ for reporting depreciation.

Assume the taxpayer had health coverage for the entire year.

The taxpayer does not want to contribute to the presidential election campaign.

If an amount box does not require an entry or the answer is zero, enter $"0".$

Do not round any percentages.

If required, round your answers to the nearest dollar.

If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers.

Special instructions for Form $8582$: If required, use the minus sign to enter a "loss" as a negative number on the lines $1$d$,3$ and $11.$ However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.Complete Theodore's Schedule $1.$

SCHEDULE $1$

$($Form $1040)$

Department of the Treasury

Internal Revenue Service

Additional Income and Adjustments to Income

Attach to Form $1040,1040-$SR$,$ or $1040-$NR$.$

Go to

www$.$irs.gov$/$Form$1040$ for instructions and the latest information.

OMB No$.1545-0074$

$2023$

Attachment

Sequence No$.01$

Name$($s$)$ shown on Form $1040,1040-$SR$,$ or $1040-$NR$.$

Theodore E$.$ Lariat

Your social security number

$775-89-9532$

Part I Additional Income

$1$ Taxable refunds, credits, or offsets of state and local income taxes

$2$a Alimony received.

b Date of original divorce or separation agreement $($see instructions$)$:

$3$ Business income or $($loss$).$ Autach Schedule C

$4$ Other gains or $($losses$).$ Attach Form $4797.$

$5$ Rental real estate, royalties,