! Required information (The following information applies to the questions displayed below.) Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. a. Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c. Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. d. Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. e. Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. f. Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to ken. Ken received the check on December 30 in the amount of $1,100. g. Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,250 in itemized deductions last year (the standard deduction for a single filer was $12,200). h. Ken received $30,000 of interest from corporate bonds and money market accounts. Determine Ken's gross income. Gross income X This is a numeric cell, so please enter numbers only. Dependents (see instructions): (3) Relationship to you (2) Social security number (Enter as XXX-XX-XXXX) (4) if qualifies for (see instructions): Child tax credit Credit for other dependents (1) First name Last name 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b Taxable interest. Attach Sch. B if 2a Tax-exempt interest 2a 2b required 3a Qualified dividends 3a b Ordinary dividends. Attach Sch. Bif 3b required 4a IRA distributions 4a b b Taxable amount 4b Standard Deduction for Pensions and annuities 4c d Taxable amount 4d Single or Married filing separately, 5a Social security benefits 5a b b Taxable amount 5b $12,200 Married filing 6 Capital gain or (loss). Attach Schedule D if required. If not required, check here jointly or 6 Qualifying Ta Other income from Schedule 1, line 9 7a widow(er), $24.400 , , . b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income 7b 0 Head of household, $18,350 8a Adjustments to income from Schedule 1, line 22 8 If you checked any box under 8b b Subtract line 8a from line 7b. This is your adjusted gross income Standard Deduction, see 9 Standard deduction or itemized deductions (from Schedule A) 9 instructions 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 11a Add lines 9 and 10 11a b Taxable income. Subtract line 11a from line 8b 11b For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2019) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2020 McGraw-Hill Education. 1 1 2 2a b 3 3 4 4 5 5 6 6 7 7 8 8 9 0 Part II 10 10 Taxable refunds, credits, or offsets of state and local income taxes Alimony received 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 Other income. List type and amount Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Adjustments to Income Educator expenses Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18a 18a b 19 19 20 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 ! Required information (The following information applies to the questions displayed below.) Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. a. Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c. Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. d. Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. e. Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. f. Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to ken. Ken received the check on December 30 in the amount of $1,100. g. Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,250 in itemized deductions last year (the standard deduction for a single filer was $12,200). h. Ken received $30,000 of interest from corporate bonds and money market accounts. Determine Ken's gross income. Gross income X This is a numeric cell, so please enter numbers only. Dependents (see instructions): (3) Relationship to you (2) Social security number (Enter as XXX-XX-XXXX) (4) if qualifies for (see instructions): Child tax credit Credit for other dependents (1) First name Last name 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b Taxable interest. Attach Sch. B if 2a Tax-exempt interest 2a 2b required 3a Qualified dividends 3a b Ordinary dividends. Attach Sch. Bif 3b required 4a IRA distributions 4a b b Taxable amount 4b Standard Deduction for Pensions and annuities 4c d Taxable amount 4d Single or Married filing separately, 5a Social security benefits 5a b b Taxable amount 5b $12,200 Married filing 6 Capital gain or (loss). Attach Schedule D if required. If not required, check here jointly or 6 Qualifying Ta Other income from Schedule 1, line 9 7a widow(er), $24.400 , , . b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income 7b 0 Head of household, $18,350 8a Adjustments to income from Schedule 1, line 22 8 If you checked any box under 8b b Subtract line 8a from line 7b. This is your adjusted gross income Standard Deduction, see 9 Standard deduction or itemized deductions (from Schedule A) 9 instructions 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 11a Add lines 9 and 10 11a b Taxable income. Subtract line 11a from line 8b 11b For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2019) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2020 McGraw-Hill Education. 1 1 2 2a b 3 3 4 4 5 5 6 6 7 7 8 8 9 0 Part II 10 10 Taxable refunds, credits, or offsets of state and local income taxes Alimony received 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 Other income. List type and amount Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Adjustments to Income Educator expenses Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18a 18a b 19 19 20 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