Request: 2021 tax return work paper

ALAN AND ERICA WRIGHT INDIVIDUAL FEDERAL INCOME TAX RETURN Alan (age 52) and Erica (age 54) Wright are married and live in Akron, Ohio. Alan is the Chief Marketing Officer at a large electric company. Erica is a graphic design executive who currently consults with former clients. The Wrights have three children Angelica (age 18), Gordon (age 15), and Phil (age 12). In January, Angelica left home to attend a liberal arts college. The Wrights pay for Angelica's tuition and room in board while she takes classes full time; she is not currently employed. . The Wrights provided the following information: Alan's social security number is 598-94-2583 Erica's social security number is 301-52-2942 Angelica's social security number is 887-44-8710 Gordon's social security number is 810-42-9092 Phil's social security number is 855-11-3021 The Wright's mailing address is 2124 Daniels Ave, Akron, OH 44312 . . Alan Wright reported the following the following information relating to his employment during the year: Employer Gross Wages Federal Income Tax Withholding $36,250 State Income Tax Withholding $9,000 General Electric $147,276 The above amounts do not reflect any income items described below. Alan's employer withheld all payroll taxes it was required to withhold. The entire Wright family was covered by minimum essential health insurance during each month in 2021. The insurance, valued at $16,000, was provided by Alan's employer, General Electric. Erica Wright received the following self-employment income during the year (she uses the cash method of accounting) Consulting revenue reported to her on a Form 1099-MISC, Box 7 High-end Retail $35,000 Mustard Seed Health Products $7,600 Strategic Solutions $2,650 In this self-employment endeavor, Erica is an active participant and the activities qualify as trade or businesses for the Qualified Business Income Deduction. Unfortunately, Erica did not keep records of any of her business expenses for the year. The Wrights also received the following during the year: Interest income from First Bank of Ohio Interest income from Akron, Ohio School District Interest income from U.S. Treasury Bond Interest income from General Mills corporate bond $315 $210 $345 $385 Interest income from the State of Connecticut's Tourism Support Private Activity Bond Qualified dividend income from AT&T Qualified dividend income from Verizon Qualified dividend income from JPMorgan Chase Qualified dividend income from Target Corp. Qualified dividend income from Wells Fargo Qualified dividend income from Procter & Gamble Qualified dividend income from PepsiCo Qualified dividend income from Kellogg Qualified dividend income from Abbott Labs Qualified dividend income from Walmart Life insurance payment - Mutual life (mother's passing) Cash gift from her father Ohio state income tax refund* $60,000 $1,450 $745 $210 $435 $143 $200 $230 $210 $285 $345 $145,000 $4,000 $350 * Refund was from state tax they paid in 2020. They deducted all of their state taxes as itemized deductions in 2020. Total itemized deductions were $32,000, $3,000 of which were state taxes. . Erica received the following payments as a result of a lawsuit she filed for damages sustained in a car accident: Medical Expenses for physical injuries $16,400 Emotional Distress (from having been physically injured) $7,200 Punitive Damages $32,000 Total $55,600 . Eight years ago, Alan purchased an annuity contract for $93,000. He received his first annuity payment on January 1, 2021. The annuity will pay Alan $17,000 per year for ten years (beginning with this year). The $17,000 payment was reported to Alan on Form 1099-R for the current year. On January 3, 2021, the Wrights sold their prior principal residence. They purchased that residence in 2011 and had lived there full-time until they sold it this year. They originally purchased the home for $305,000. The Wright family has never claimed any tax depreciation (nor were they allowed to) on the home. The sales price of the home was $840,000. The home is located at 502 Greystone Drive, Wadsworth, OH 44281. The Wrights took two trips to Cleveland. While on the first trip they lost $2800 gambling, but on the second trip they won $2500. The Wrights did not own, control or manage any foreign bank accounts, nor were they grantors or beneficiaries of a foreign trust during the tax year. The Wrights made the following payments during 2021: Dentist (unreimbursed by insurance) Doctors (unreimbursed by insurance) Prescriptions (unreimbursed by insurance) Real property taxes on residence $1,400 $450 $300 $4,500 Vehicle registration fee (based on age of the vehicle) Mortgage interest on principle residence Contribution to the American Cancer Society Contribution to the Habitat for Humanity Contribution to Methodist Church of OH Contribution to Senator Bob Left's Re-election Campaign $150 $7,950 $2,200 $1,500 $2,750 $2,600 During the year, Alan paid $17,400 in alimony and child support payments to a former spouse, Natalie (SSN #568-72-8787), whom he divorced in 2014. When his daughter Wendy (SSN #568-72-666), who lives with her mother full-time, reaches the age of 18 the payments will drop to $6,400. The Wrights had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B and basis information for each stock sale was reported to the IRS): Sold 2,000 shares of Verizon Sold 75 shares of Apple, Inc. Sold 300 shares of JPMorgan Chase Purchased 100 shares of Procter & Gamble Purchased 350 shares of JPMorgan Chase Purchased 350 shares of PepsiCo Purchased 300 shares of Kellogg 7/1/21 4/15/21 10/14/21 7/10/21 11/1/21 5/14/21 10/14/21 $22,000 $27,625 $14,300 $7,700 $14,000 $32,000 $21,000 Relevant tax basis/holding period information related to sales of securities in the current year: Purchased 2,000 shares of Verizon on 5/1/20 for $20,000 Purchased 200 shares of Apple, Inc. on 3/8/18 for $89,000 Purchased 300 shares of JPMorgan Chase on 1/12/17 for $8,000 In order for Alan and Erica to maintain their full-time jobs, they send Phil to a child care program after school five days a week. During the year, they paid the day care operator $12,200 for Phil's care. The Wrights' personal residence was burglarized on October 1. The Wrights had the following personal- use property stolen: Item Purchase Date Tax Basis of Item Fair Value on Date of Theft Insurance Reimbursement Received 600 400 09/01/2021 03/01/2018 4,000 3,000 4,000 3,500 Bike Desktop Computer TV/Projector Gold Jewelry Total 03/01/2018 07/01/2019 6,000 7,000 13,000 12,000 11,000 24,000 1,200 600 2,400 ALAN AND ERICA WRIGHT INDIVIDUAL FEDERAL INCOME TAX RETURN Alan (age 52) and Erica (age 54) Wright are married and live in Akron, Ohio. Alan is the Chief Marketing Officer at a large electric company. Erica is a graphic design executive who currently consults with former clients. The Wrights have three children Angelica (age 18), Gordon (age 15), and Phil (age 12). In January, Angelica left home to attend a liberal arts college. The Wrights pay for Angelica's tuition and room in board while she takes classes full time; she is not currently employed. . The Wrights provided the following information: Alan's social security number is 598-94-2583 Erica's social security number is 301-52-2942 Angelica's social security number is 887-44-8710 Gordon's social security number is 810-42-9092 Phil's social security number is 855-11-3021 The Wright's mailing address is 2124 Daniels Ave, Akron, OH 44312 . . Alan Wright reported the following the following information relating to his employment during the year: Employer Gross Wages Federal Income Tax Withholding $36,250 State Income Tax Withholding $9,000 General Electric $147,276 The above amounts do not reflect any income items described below. Alan's employer withheld all payroll taxes it was required to withhold. The entire Wright family was covered by minimum essential health insurance during each month in 2021. The insurance, valued at $16,000, was provided by Alan's employer, General Electric. Erica Wright received the following self-employment income during the year (she uses the cash method of accounting) Consulting revenue reported to her on a Form 1099-MISC, Box 7 High-end Retail $35,000 Mustard Seed Health Products $7,600 Strategic Solutions $2,650 In this self-employment endeavor, Erica is an active participant and the activities qualify as trade or businesses for the Qualified Business Income Deduction. Unfortunately, Erica did not keep records of any of her business expenses for the year. The Wrights also received the following during the year: Interest income from First Bank of Ohio Interest income from Akron, Ohio School District Interest income from U.S. Treasury Bond Interest income from General Mills corporate bond $315 $210 $345 $385 Interest income from the State of Connecticut's Tourism Support Private Activity Bond Qualified dividend income from AT&T Qualified dividend income from Verizon Qualified dividend income from JPMorgan Chase Qualified dividend income from Target Corp. Qualified dividend income from Wells Fargo Qualified dividend income from Procter & Gamble Qualified dividend income from PepsiCo Qualified dividend income from Kellogg Qualified dividend income from Abbott Labs Qualified dividend income from Walmart Life insurance payment - Mutual life (mother's passing) Cash gift from her father Ohio state income tax refund* $60,000 $1,450 $745 $210 $435 $143 $200 $230 $210 $285 $345 $145,000 $4,000 $350 * Refund was from state tax they paid in 2020. They deducted all of their state taxes as itemized deductions in 2020. Total itemized deductions were $32,000, $3,000 of which were state taxes. . Erica received the following payments as a result of a lawsuit she filed for damages sustained in a car accident: Medical Expenses for physical injuries $16,400 Emotional Distress (from having been physically injured) $7,200 Punitive Damages $32,000 Total $55,600 . Eight years ago, Alan purchased an annuity contract for $93,000. He received his first annuity payment on January 1, 2021. The annuity will pay Alan $17,000 per year for ten years (beginning with this year). The $17,000 payment was reported to Alan on Form 1099-R for the current year. On January 3, 2021, the Wrights sold their prior principal residence. They purchased that residence in 2011 and had lived there full-time until they sold it this year. They originally purchased the home for $305,000. The Wright family has never claimed any tax depreciation (nor were they allowed to) on the home. The sales price of the home was $840,000. The home is located at 502 Greystone Drive, Wadsworth, OH 44281. The Wrights took two trips to Cleveland. While on the first trip they lost $2800 gambling, but on the second trip they won $2500. The Wrights did not own, control or manage any foreign bank accounts, nor were they grantors or beneficiaries of a foreign trust during the tax year. The Wrights made the following payments during 2021: Dentist (unreimbursed by insurance) Doctors (unreimbursed by insurance) Prescriptions (unreimbursed by insurance) Real property taxes on residence $1,400 $450 $300 $4,500 Vehicle registration fee (based on age of the vehicle) Mortgage interest on principle residence Contribution to the American Cancer Society Contribution to the Habitat for Humanity Contribution to Methodist Church of OH Contribution to Senator Bob Left's Re-election Campaign $150 $7,950 $2,200 $1,500 $2,750 $2,600 During the year, Alan paid $17,400 in alimony and child support payments to a former spouse, Natalie (SSN #568-72-8787), whom he divorced in 2014. When his daughter Wendy (SSN #568-72-666), who lives with her mother full-time, reaches the age of 18 the payments will drop to $6,400. The Wrights had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B and basis information for each stock sale was reported to the IRS): Sold 2,000 shares of Verizon Sold 75 shares of Apple, Inc. Sold 300 shares of JPMorgan Chase Purchased 100 shares of Procter & Gamble Purchased 350 shares of JPMorgan Chase Purchased 350 shares of PepsiCo Purchased 300 shares of Kellogg 7/1/21 4/15/21 10/14/21 7/10/21 11/1/21 5/14/21 10/14/21 $22,000 $27,625 $14,300 $7,700 $14,000 $32,000 $21,000 Relevant tax basis/holding period information related to sales of securities in the current year: Purchased 2,000 shares of Verizon on 5/1/20 for $20,000 Purchased 200 shares of Apple, Inc. on 3/8/18 for $89,000 Purchased 300 shares of JPMorgan Chase on 1/12/17 for $8,000 In order for Alan and Erica to maintain their full-time jobs, they send Phil to a child care program after school five days a week. During the year, they paid the day care operator $12,200 for Phil's care. The Wrights' personal residence was burglarized on October 1. The Wrights had the following personal- use property stolen: Item Purchase Date Tax Basis of Item Fair Value on Date of Theft Insurance Reimbursement Received 600 400 09/01/2021 03/01/2018 4,000 3,000 4,000 3,500 Bike Desktop Computer TV/Projector Gold Jewelry Total 03/01/2018 07/01/2019 6,000 7,000 13,000 12,000 11,000 24,000 1,200 600 2,400