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 $1,500 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b. Ken sold 1,300 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 $28,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $235,200. d. Ken received $13,750 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 $800 cash scholarship to attend. He used $450 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 $1,550. g. Ken received a $760 refund of the $3,900 in state income taxes his employer withheld from his pay last year. Ken claimed $12,750 in itemized deductions last year (the standard deduction for a single filer was $12,400). h. Ken received $33,000 of interest from corporate bonds and money market accounts. 2. Complete page 1 of Form 1040 through line 9 and Schedule 1 for Ken. (Input all the values as positive numbers. Enter any non- financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Use 2021 tax rules regardless of year on tax form.) Social security numbers: Ken: 111-22-3333 1040 PG 1 Schedule 1 Form 1040 Page 1. Form 1040 Department of the Treasury- Internal Revenue Service (99) U.S. Individual Income Tax Return Filing Status Check only one box. Single 2020 OMB No. 1545-0074 Married filing Married filing separately (MFS) jointly IRS Use Only-Do not write or staple in this space. Head of household (HOH) Qualifying widow(er) (QW) If you checked the MFS box, enter the name of your spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is a child but not your dependent. Your first name and middle initial Last name Ken If joint return, spouse's first name and middle initial Last name Your social security number 111-22-3333 Spouse's social security number Home address (number and street). If you have a P.O. box, see instructions. Apt. no. City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code Foreign country name Foreign province/state/county Foreign postal code Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. Someone can claim: You as a dependent Age/Blindness Dependents You: (see instructions): Spouse itemizes on a separate return or you were a dual-status alien Were born before January 2, 1956 Are blind At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Standard Deduction You Spouse Yes O No Your spouse as a dependent Spouse: Was born before January 2, 1956 Is blind (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name Credit for other Child tax credit dependents If more than four dependents, see instructions and check here 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest Attach Sch. B if required. 3a Qualified dividends 4a IRA distributions 5a Pensions and annuities 6a Social security benefits 10 Adjustments to income: Standard Deduction for Single or Married filing separately, $12,400 Married filing 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here 8 Other income from Schedule 1, line 9 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income 2a b Taxable interest. 2b b Ordinary dividends. 3b 4a b Taxable amount 4b 5a b Taxable amount 5b 6a b Taxable amount 6b 7 8 9 0 jointly or a From Schedule 1, line 22 Qualifying widow(er), $24,800 Head of household, $18,650 If you checked any box under Standard Deduction, see instructions. c Add lines 10a and 10b. These are your total adjustments to income 12 Standard deduction or itemized deductions (from Schedule A) 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 14 Add lines 12 and 13 10a b Charitable contributions if you take the standard deduction. See instruction 10b 10c 11 Subtract line 10c from line 9. This is your adjusted gross income 11 12 13 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2020) 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. 2021 McGraw-Hill Education. 2. Complete page 1 of Form 1040 through line 9 and Schedule 1 for Ken. (Input all the values as positive numbers. Enter any non- financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Use 2021 tax rules regardless of year on tax form.) f2 Social security numbers: Ken: 111-22-3333 1040 for a single taxpayer. ed 1040 PG 1 Schedule 1 ak Form 1040 Schedule 1. nces SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service Additional Income and Adjustments to Income Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Name(s) shown on Form 1040, 1040-SR, or 1040-NR Additional Income OMB No. 1545-0074 2020 Attachment Sequence No. 01 Your social security number 111-22-3333 Part I 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received 1 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or (losses). Attach Form 4797 4 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 5 6 Farm income or (loss). Attach Schedule F 6 7 Unemployment compensation 7 8 Other income. List type and amount I 8 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 9 0 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 13 Moving expenses for members of the Armed Forces. Attach Form 3903 14 Deductible part of self-employment tax. Attach Schedule SE 12 13 14 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 Health savings 13 14 15 16 17 18a b Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN 13 14 15 16 17 18a Date of original divorce or separation agreement (see instructions) 19 19 IRA deduction 20 20 Student loan interest deduction 21 Tuition and fees deduction. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 10a 22 Cat. No. 71479F For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040)2020 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. 2021 McGraw-Hill Education. < 1040 PG 1 Schedule 1 >