Read the case on which your Portfolio Project is based. Determine all items that will be deducted before the AGI calculation. In an MS Excel spreadsheet, list all deductible items in column A. In column B, determine where that deduction should appear on Form 1040 (for tax year 2017).

Case:

Brian and Sheila Williams were married in October of 2008. They live at 1000 Main Street, Atlanta, GA 33127. Brian is a postal service worker. Sheila is a teacher at Grady High School. Brians social security number is 555-11-1111 and Sheilas social security number is 555-22-2222. They have a dependent daughter Jayla who is 10 years old (Born on May 12th). Jaylas social security number is 555-33-3333. In 2016, Brian's wages was $45,860 while Sheila's was $43,590.

Included or Excluded Items

Reasoning for Including or Excluding and if Including, Indicate amount to include

Two years ago, the taxpayer loaned a friend $2000. The friend has filed for bankruptcy this year and will not be able to repay

Earned $100 interest on county municipal bonds

Found a diamond worth $1000 on the ground

Received $500 in death benefits fron Brian's father

Received $4,000 court settlement. $1,000 was punitive damanges.

Brian paid $400/month in child support

Received a $1000 gift from his brother

Sheila won $100 playing bingo

Brian paid $200/month in alimony to his ex-wife

Sheila received a $1000 gift from her mother

Sheila spent $300 on supplies for her classroom

Portfolio Investments

Stock

Acquired

Sold

Sales Price

Cost (Basis)

Qualified Dividends

Red Stock

2/1/2016

10/5/2016

$6,000

$2,500

$0

White Stock

6/11/2009

10/15/2016

$5,000

$4,000

$100

Blue Stock

10/1/2005

8/3/2016

$2,000

$10,000

$0

Black Stock

3/6/2016

12/15/2016

$3,000

$5,000

$0

Yellow Stock

4/5/2006

N/A

N/A

$5,000

$300

Interest Income Source

Amount

Money Market Account

$200

Savings Account

$25

State Municipal Bonds

$35

Rental Property

They own and rent two pieces of residential real estate in Miami, FL. These properties were acquired with cash (so there are no mortgages on the homes). They both have real estate broker licenses in Georgia and Florida. They dedicate enough hours (through their business) to qualify as a real estate professional with regard to these properties.

Property 1

The first property is located at 17750 NW 17th Ave, Miami, FL. They collect $1,000 monthly in rent. The property was purchased June 30, 2016 for $150,000. The tax records show that the value of the land is $30,000 and the value of the home was $90,000 when purchased. They actively participate in the management of the real property.

The property has the following expenditures:

Property tax

$7,000/yr

Repairs

$ 900/yr

Insurance

$1,200/yr

Washing Machine

$300

(purchased 6/2/2015)

Refrigerator

$700

(purchased 7/1/2016)

Furniture

$2,000

(purchased 4/1/2014)

Property 2

The second property is located at 5610 NW 11th Ave, Miami, FL. They collect $1,500 monthly in rent. The property was purchased on June 12, 2016 for $100,000. The tax records show that the value of the land is $20,000 and the value of the home was $80,000 when purchased. They actively participate in the management of the real property.

The property has the following expenditures:

Property tax

$6,200/yr

Repairs

$3,000/yr

Insurance

$1,200/yr

Legal fees

$ 500/yr

Advertising Expense

$ 500/yr

Form 1040:

Form 1040 Department of the Treasury

Internal Revenue Service

2016

U.S. Individual Tax Form

OMB No.1545-0074

IRS Use Only--Do not write or staple in this space

For the year Jan.1--Dec. 31,2016, or any other tax year beginning

,2016,

,20

See Separate Instructions

Your first name and initial

Last name

Social Security Number

If a joint return, spouses first name and initial

Last name

Spouse Social Security Number

Home address( number and street). If you have a P.O. Box, see instructions

Make Sure that the SSN(s) above

and on line 6c are correct

.

City, town, or post office, state, and zip code. If you have a foreign address, also complete spaces below (see instructions).

Presidential Election Campaign

Check here if you, or your spouse if filing jointly,

Foreign country name

Foreign province/state/country

Foreign postal code

checking this box below will not change your tax

refund.

you

spouse

Filing Status

1. Single

4.Head of Household (with qualifying person.) (See instructions.) If

Check only one box

2.. married filing jointly

the qualifying person is a child but not your dependent, enter this

3. Married filing separately. Enter spouse's SSN above

child's name here

and full name here.

5. Qualifying Window(er) with dependent child

Exemptions

6a Yourself. If someone can claim you as a dependent, do not check box 6a

]

Boxes checked

b spouse

]

on 6a and 6b

If more than four

c. Dependents

dependents, see

(1) First name

Last name

(2) dependents

(3) dependents

(4) check if child under age 17

No. of children

instructions and

social security number

relationship to you

qualifying for tax credit see

on 6c who:

check here

instructions.

lived with you

did not live with you

due to divorce or

separation

(see instructions)

Dependents on

6c not entered

above

d. Total number of Exemptions Claimed

Add numbers on lines above

Income

7

Wages, salaries, tips, etc. Attach Forms (W-2)

7

8a

Taxable interest. Attach Schedule B if required

8a

Attach Form(s)

b

Tax-exempt interest. Do not include on line 8a

8b

W-2 here. Also

9a

Ordinary dividends. Attach Schedule B if required

9a

attach Forms(s)

b

Qualified dividends

9b

W-2 and 1099-R

10

Taxable refunds, credits, or offsets state or local income taxes

10

if tax was withheld.

11

Alimony received

11

12

Business income or (loss). Attach Schedule C or C-EZ

12

If you did not

13

Capital gain or (loss). Attach Schedule D if required. If not required, check here

13

get a W-2,

14

other gains or (losses). Attach Form 4797

14

see instructions

15a

IRA distributions

15a

b Taxable amount

15b

16a

Pensions and annuities

16a

b Taxable amount

16b

17

Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E

17

18

Farm income or (loss). Attach Schedule F

18

19

Unemployment compensation

19

20a

Social security benefits

20a

b Taxable amount

20b

21

other income. List type and amount

21

22

combine the amounts in the far right column for lines 7 through 21. This is your total income

This is your total income.

22

Adjusted

23

Educator expenses

23

Gross

24

Certain business expenses of reservists, performing artists, and fee-basis government. Attach Form 2106 or 2106-EZ

24

Income

25

Health-savings account deduction. Attach Form 8889

25

26

Moving Expenses. Attach Form 3903

26

27

Deductible part of self-employment tax. Attach Schedule SE

27

28

Self-employed SEP, SIMPLE, and qualified plans

28

29

Self-employed health insurance deduction

29

30

Penalty on early withdrawal of savings

30

31a

Alimony paid b. Recipient's SSN

31a

2400

32

IRA deduction

32

33

Student loan interest deduction

33

34

Tuition and fees. Attach Form 8917

34

35

Domestic production activities deduction. Attach Form 8903

35

36

Add lines 23 through 35

36

37

Subtract line 36 from line 22. This is your adjusted gross income.

37