Required information [The following information applies to the questions displayed below.] During 2021, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets 300 shares of IBM common 200 shares of IBM common Broker's Commission Paid Date Acquired 11/22/2018 Purchase Price $ 10,590 at Time of Purchase $ 100 4/3/2019 12/12/2019 8/14/2020 3/2/2021 43,490 171,000 54,900 17,100 300 1,300 550 No-load fund* 3,000 shares of Apple preferred 2,100 shares of Cisco common 420 shares of Vanguard mutual fund *No commissions are charged when no-load mutual funds are bought and sold. Because of the downturn in the stock market, Mr. and Mrs. Howell decided to sell most of their stocks and the mutual fund in 2021 and to reinvest in municipal bonds. The following investment assets were sold in 2021: Investment Assets 300 shares of IBM common 3,000 shares of Apple preferred 2,100 shares of Cisco common Broker's Commission Paid Date Sold 5/6 10/5 8/15 12/21 Sale Price $ 16,100 223,800 63,490 18,100 at Time of Sale $ 100 2,000 650 No-load fund* 451 shares of Vanguard mutual fund *No commissions are charged when no-load mutual funds are bought and sold. The Howells' broker issued them a Form 1099-B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $16,000 on the Form 1099-B they received. In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning 2021: The Howells received a Form 1099-B from the Vanguard mutual fund reporting a $900 long-term capital gain distribution. This distribution was reinvested in 31 additional Vanguard mutual fund shares on 6/30/2021. In 2014, Mrs. Howell loaned $8,400 to a friend who was starting a new multilevel marketing company called LD3. The friend declared bankruptcy in 2021, and Mrs. Howell has been notified she will not be receiving any repayment of the loan. The Howells have a $4,700 short-term capital loss carryover and a $7,200 long-term capital loss carryover from prior voare The Howells have a $4,700 short-term capital loss carryover and a $7,200 long-term capital loss carryover from prior years. The Howells did not instruct their broker to sell any particular lot of IBM stock. The Howells earned $4,200 in municipal bond interest, $4,200 in interest from corporate bonds, and $6,400 in qualified dividends. Assume the Howells have $190,000 of wage income during the year. a. Use Form 8949 and page 1 of Schedule D to compute net long-term and short-term capital gains. Then, compute the Howells' tax liability for the year (ignoring the alternative minimum tax and any phase-out provisions) assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $26,000. Assume that asset bases are reported to the IRS. (Use the tax rate schedules, Dividends and Capital Gains Tax Rates.) Mr. Howell social security number: 412-34-5670 (Input all values as positive numbers unless instructed otherwise on the forms. Negative amounts should be indicated by a minus sign. Use 2021 tax rules regardless of year on tax form.) Complete this question by entering your answers in the tabs below. Form 8949 PG1 Form 8949 PG2 Schedule D Form 8949 Page 1 and 2. Form 8949 Department of the Treasury - Internal Revenue Service Name(s) shown on return Sales and Other Dispositions of Capital Assets Go to www.irs.gov/Form8949 for instructions and the latest information. File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Schedule D. OMB No. 1545-0074 2020 Attachment Sequence No. 12A Social security number or taxpayer identification number Mr. and Mrs. Howell 412-34-5670 Refore you check Rov A. R. or Chelow see whether you received any Form(s) 1099-R or substitute statement(s) from your broker. A substitute Required information Mr. and Mrs. Howell 412-34-5670 Before you check Box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Note: Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long-term transactions, see page 2. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or C below. Check only If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, one box. for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. 1 (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B (a) Description of property (Example: 100 sh. XYZ Co.) (b) Date acquired (Mo., day, yr.) (c) Date sold or disposed of (Mo., day, yr.) (d) Proceeds (sales price) (see instructions) (e) Cost or other basis. See the Note below and see Column (e) in the separate instructions Adjustment, if any, to gain or loss. If you enter an amount in column (g), enter a code in column (f). See the separate instructions. (f) Code(s) from instructions (g) Amount of adjustment (h) Gain or (loss). Subtract column (e) from column (d) and combine the result with column (g) various various 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (a) in the separate instructions for how to figure the amount of the adjustment Required information Part I See instructions for how to figure the amounts to enter on the lines below. Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) (d) Proceeds (sales price) (e) Cost (or other basis) (g) Adjustments to gain or loss from Form(s) 8949, Part 1, line 2, column (g) (h) Gain or (loss). Subtract column (e) from column (d) and combine the result with column (g) This form may be easier to complete if you round off cents to whole dollars. 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b 1b Totals for all transactions reported on Form(s) 8949 with Box A checked 2 Totals for all transactions reported on Form(s) 8949 with Box B checked 3 Totals for all transactions reported on Form(s) 8949 with Box C checked 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long-term capital gains or losses, go to Part Il below. Otherwise, go to Part III on the back Part II Long-Term Capital Gains and Losses-Generally Assets Held More Than One Year (see instructions) (d) Proceeds (sales price) (e) Cost (or other basis) See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars. 8a Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b 8b Totals for all transactions reported on Form(s) 8949 with Box D checked 9 Totals for all transactions reported on Form(s) 8949 with Box E checked 10 Totals for all transactions reported on Form(s) 8949 with Box F checked 4 5 6 (g) Adjustments to gain or loss from Form(s) 8949, Part II,line 2, column (g) (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with column (g) 11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13 Capital gain distributions. See the instructions 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 11 12 13 (Enter as negative) 14 0 Required information 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. 1 (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B (a) Description of property (Example: 100 sh. XYZ Co.) (b) Date acquired (mm/dd/yyyy) (c) Date sold or disposed of (mm/dd/yyyy) Adjustment, if any, to gain or loss. If you (d) Proceeds (sales price) (see instructions) (e) Cost or other basis. See the Note below and see Column (e) in the separate instructions enter an amount in column (g), enter a code in column (f). See the separate instructions. (f) Code(s) from instructions (g) Amount of adjustments (h) Gain or (loss). Subtract column (e) from column (d) and combine the result with column (g). 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 8b (if Box D above is checked), line 9 (if Box E above is checked), or line 10 (if Box F above is checked) 0 Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter and adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. 0