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Comprehensive Problem 4-56 (LO 4-1, LO 4-2, LO 4-3)
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[The following information applies to the questions displayed below.] Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine Jr., Michael, and Candice). The couple received salary income of $100,000 and qualified business income of $10,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $3,050 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
Comprehensive Problem 4-56 Part b
Complete page 1, page 2, and Schedule 1 of the Jacksons Form 1040 (use the most recent form available).
Demarco and Janine Jackson's address is 19010 N.W. 135th Street, Miami, FL 33054.
Social security numbers:
Demarco: 123-45-6789 Janine: 234-56-7890
Son: Damarcus: 345-67-8901 Daughter: Janine Jr : 456-78-9012
Son: Michael : 567-89-0123 Daughter: Candice: 678-90-1234
Age/Blindness You: Were born before January 2, 1955 Are blind (2) Social security number Spouse: Was born before January 2, 1955 Is blind (3) Relationship to you (4) if qualifies for (see instructions): Dependents (see instructions) (1) First name Last name Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest 2a 2b 3a Qualified dividends 3a b Taxable interest. Atlach Sch. Bir required b Ordinary dividends. Attach Sch. Bit required b Taxable amount 3b 4a IRA distributions 4a 40 c Pensions and annuities 4c d Taxable amount 4d 5a Social security benefits 5a b Taxable amount 5b 6 7a Other income from Schedule 1, line 9 7a Standard Deduction for - Single or Married filing separately. $12,200 - Married filing jointly or Qualifying widow(er), $24,400 Head of household, $18,350 . If you checked any box under Standard" Deduction, see instructions b Add lines 1.2b, 3b. 4b, 40, 56, 6, and 7a. This is your total income 7b 8 a Adjustments to income from Schedule 1, line 22 aa b Subtract line 8a from line 7b. This is your adjusted gross income 8b 9 9 Standard deduction or itemized deductions (from Schedule A) 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 11a 11a Add lines 9 and 10 b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- 11b Name(s) shown on Form 1040 or 1040-SR Your social security number Yes No At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Parti Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received 2a b 3 3 4 4 Date of original divorce or separation agreement (see instructions) Business income or (loss). Attach Schedule C Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation 5 5 6 6 7 7 8 Other income. List type and amount 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid 18a b Recipient's SSN Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 Age/Blindness You: Were born before January 2, 1955 Are blind (2) Social security number Spouse: Was born before January 2, 1955 Is blind (3) Relationship to you (4) if qualifies for (see instructions): Dependents (see instructions) (1) First name Last name Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest 2a 2b 3a Qualified dividends 3a b Taxable interest. Atlach Sch. Bir required b Ordinary dividends. Attach Sch. Bit required b Taxable amount 3b 4a IRA distributions 4a 40 c Pensions and annuities 4c d Taxable amount 4d 5a Social security benefits 5a b Taxable amount 5b 6 7a Other income from Schedule 1, line 9 7a Standard Deduction for - Single or Married filing separately. $12,200 - Married filing jointly or Qualifying widow(er), $24,400 Head of household, $18,350 . If you checked any box under Standard" Deduction, see instructions b Add lines 1.2b, 3b. 4b, 40, 56, 6, and 7a. This is your total income 7b 8 a Adjustments to income from Schedule 1, line 22 aa b Subtract line 8a from line 7b. This is your adjusted gross income 8b 9 9 Standard deduction or itemized deductions (from Schedule A) 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 11a 11a Add lines 9 and 10 b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- 11b Name(s) shown on Form 1040 or 1040-SR Your social security number Yes No At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Parti Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received 2a b 3 3 4 4 Date of original divorce or separation agreement (see instructions) Business income or (loss). Attach Schedule C Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation 5 5 6 6 7 7 8 Other income. List type and amount 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid 18a b Recipient's SSN Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22
