Questions and Problems 6-45 REHENSIVE PROBLEMS 1. Richard and Christine McCarthy have a 19-year-old son (born 10/2/2000; Social Security number 555-55-1212), Jack, who is a full-time student at the University of Key West. Years ago, the McCarthys shifted a significant amount of investments into lack's name. In 2019, Jack received Forms 1099-INT and 1099-DIV that reported the following: Tandy Corporation Bonds interest Tandy Corporation ordinary dividends The dividends are not qualified dividends. In addition, Jack works part-time as a waiter in an upscale seafood restaurant in Miami, FL. His 2019 Form W-2 reported: $11,300 3,400 Wages Federal withholding $12,800 1,080 In spite of his fairly large income, the McCarthys provide over 50 percent of his sup- port and claim Jack as a dependent in 2019. Jack's mailing address is 100 Duval Street, Apt. #B12, Key West, FL 33040. Richard's Social Security number is 100-10-9090. Use Form 1040, Schedule B, Form 8615, and the Tax Computation Worksheet from the Form 8615 instructions to compute Jack's 2019 income tax. 2A. Richard McCarthy (born 2/14/1965; Social Security number 100-10-9090) and Christine McCarthy (born-6/1/1967; Social Security number 101-21-3434) have a 19-year-old son (born 10/2/2000 Social Security number 555-55-1212), Jack who is a full-time student at the University of Key West. The McCarthys also have a 12-year- old daughter (Social Security number 444-23-1212), Justine, that lives with them. The McCarthys can claim a $2,000 child tax credit for Justine and a $500 other dependent credit for Jack. Richard is the CEO at a paper company. His 2019 Form W-2: 100-10-9090 Mura Employer identification number EN 32-5656567 QVID No. 1545-00 FASTIUS 155 230,500.00 e-file 56.000.00 1 8 .239.80 Mufflin-Dunder Paper 302 Lackawanna Ave. Scranton, PA 18503 132.900.00 230,500.00 3.616.75 d Control aber Employees is name and in s trume Richard McCarthy 32 Sleepy Hollow Rd. Clarks Summit, PA 18411 Employee's address and ZIP code 15 Sate Employer's state 10 PAL. 1234824 16 we wages, etc 230,500.00 13,800.00 Department of the Treasury 2019 W -2 Wage and Tax Form WPZ Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service Eller 5 M Chr . Auto Pared Other To A Christine is an optometrist and operates her own practice the bes of March owns a sole proprietor. The shop address is 1030 Morgan Highway Clarks Sun ll and the business code 621320. Christine Veeps her books on the acu and her boob per provided the following information $270,541 Returns 2,877 3,961 Inventory Beginning inventory $ 24,000 Purchase 120,000 Ending Inventory 30,000 24,000 Rent Insurance 2.996 I'rofessional fees 37,113 Payroll Payroll taxes Utilities 1,995 Office expenses Depreciation 5,000 The McCarthys have a nanny housekeeper they paid $12,600 during 2019. They did not withhold income or FICA taves. The McCarthys paid Pennsylvania state unemploy- ment tax of $378 in 2019. Christine received a 2019 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,467. Note that McCarthys reasonably allocate $761 to state income tax expense for purposes of the Net Investment Income tax The McCarthys received a Form 1099-G from Pennsylvania that reported a $451 state income tax refund from 2018. The McCarthys itemized deductions in 2018 and had $14,223 of state income tax expense that was limited to $10,000. The McCarthys paid the following in 2019: Home mortgage interest $15,661 Property taxes 5,436 Estimated state income tax payments 2.400 Estimated Federal income tax payments 10,500 Charitable contributions (all cash) 7,600 Required: Complete the McCarthys' federal tax return for 2019. Use Form 1040, Schedule 1, Schedule 2, Schedule 3, Schedule A, Schedule B, Schedule C, Schedule H. Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any alternative minimum tax. Do not complete Form 4952, which is used for depreciation. The McCaulys Part 1 Home mortgage interest Property taxes Estimated state income tax payments Estimated Federal income tax payments Charitable contributions (all cash) $15,661 5,436 2,400 10,500 7,600 Required: Complete the McCarthys' federal tax return for 2019. Use Form 1040 Schedule 1, Schedule 2, Schedule 3, Schedule A, Schedule B, Schedule C, Schedule H, Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any alternative minimum tax. Do not complete Form 4952, which is used for depreciation. Questions and Problems 6-45 REHENSIVE PROBLEMS 1. Richard and Christine McCarthy have a 19-year-old son (born 10/2/2000; Social Security number 555-55-1212), Jack, who is a full-time student at the University of Key West. Years ago, the McCarthys shifted a significant amount of investments into lack's name. In 2019, Jack received Forms 1099-INT and 1099-DIV that reported the following: Tandy Corporation Bonds interest Tandy Corporation ordinary dividends The dividends are not qualified dividends. In addition, Jack works part-time as a waiter in an upscale seafood restaurant in Miami, FL. His 2019 Form W-2 reported: $11,300 3,400 Wages Federal withholding $12,800 1,080 In spite of his fairly large income, the McCarthys provide over 50 percent of his sup- port and claim Jack as a dependent in 2019. Jack's mailing address is 100 Duval Street, Apt. #B12, Key West, FL 33040. Richard's Social Security number is 100-10-9090. Use Form 1040, Schedule B, Form 8615, and the Tax Computation Worksheet from the Form 8615 instructions to compute Jack's 2019 income tax. 2A. Richard McCarthy (born 2/14/1965; Social Security number 100-10-9090) and Christine McCarthy (born-6/1/1967; Social Security number 101-21-3434) have a 19-year-old son (born 10/2/2000 Social Security number 555-55-1212), Jack who is a full-time student at the University of Key West. The McCarthys also have a 12-year- old daughter (Social Security number 444-23-1212), Justine, that lives with them. The McCarthys can claim a $2,000 child tax credit for Justine and a $500 other dependent credit for Jack. Richard is the CEO at a paper company. His 2019 Form W-2: 100-10-9090 Mura Employer identification number EN 32-5656567 QVID No. 1545-00 FASTIUS 155 230,500.00 e-file 56.000.00 1 8 .239.80 Mufflin-Dunder Paper 302 Lackawanna Ave. Scranton, PA 18503 132.900.00 230,500.00 3.616.75 d Control aber Employees is name and in s trume Richard McCarthy 32 Sleepy Hollow Rd. Clarks Summit, PA 18411 Employee's address and ZIP code 15 Sate Employer's state 10 PAL. 1234824 16 we wages, etc 230,500.00 13,800.00 Department of the Treasury 2019 W -2 Wage and Tax Form WPZ Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service Eller 5 M Chr . Auto Pared Other To A Christine is an optometrist and operates her own practice the bes of March owns a sole proprietor. The shop address is 1030 Morgan Highway Clarks Sun ll and the business code 621320. Christine Veeps her books on the acu and her boob per provided the following information $270,541 Returns 2,877 3,961 Inventory Beginning inventory $ 24,000 Purchase 120,000 Ending Inventory 30,000 24,000 Rent Insurance 2.996 I'rofessional fees 37,113 Payroll Payroll taxes Utilities 1,995 Office expenses Depreciation 5,000 The McCarthys have a nanny housekeeper they paid $12,600 during 2019. They did not withhold income or FICA taves. The McCarthys paid Pennsylvania state unemploy- ment tax of $378 in 2019. Christine received a 2019 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,467. Note that McCarthys reasonably allocate $761 to state income tax expense for purposes of the Net Investment Income tax The McCarthys received a Form 1099-G from Pennsylvania that reported a $451 state income tax refund from 2018. The McCarthys itemized deductions in 2018 and had $14,223 of state income tax expense that was limited to $10,000. The McCarthys paid the following in 2019: Home mortgage interest $15,661 Property taxes 5,436 Estimated state income tax payments 2.400 Estimated Federal income tax payments 10,500 Charitable contributions (all cash) 7,600 Required: Complete the McCarthys' federal tax return for 2019. Use Form 1040, Schedule 1, Schedule 2, Schedule 3, Schedule A, Schedule B, Schedule C, Schedule H. Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any alternative minimum tax. Do not complete Form 4952, which is used for depreciation. The McCaulys Part 1 Home mortgage interest Property taxes Estimated state income tax payments Estimated Federal income tax payments Charitable contributions (all cash) $15,661 5,436 2,400 10,500 7,600 Required: Complete the McCarthys' federal tax return for 2019. Use Form 1040 Schedule 1, Schedule 2, Schedule 3, Schedule A, Schedule B, Schedule C, Schedule H, Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any alternative minimum tax. Do not complete Form 4952, which is used for depreciation