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 Date Acquired Purchase Price 380 shares of IBM common 11/22/2018 $ 10,350 200 shares of IBM Corton 4/3/2019 43,250 3,000 shares of Apple preferred 12/12/2019 147,880 2,180 shares of Cisco common 8/14/2020 52,500 420 shares of Vanguard mutual fund 3/2/2021 14,700 "No commissions are charged when no-load mutual funds are bought and sold. Broker's Connission Paid at Time of Purchase $ 180 380 1,300 550 No-load fund 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: Broker's Connission Paid Investment Assets Date Sold Sale Price at Tine of Sale 300 shares of IBM common 5/6 $ 13,700 $ 180 3,880 shares of Apple preferred 18/5 221,400 2,000 2,100 shares of Cisco common 8/15 63,250 650 451 shares of Vanguard mutual fund 12/21 15,700 No-load fund "No commissions are charged when no-load mutual funds are bought and sold. The Howells broker issued them a Form 1099-8 showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $13,600 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 $6,000 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 $2,300 short-term capital loss carryover and a $4,800 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 $3,000 in municipal bond interest, $3,000 in interest from corporate bonds, and $4,000 in qualified dividends. Assume the Howells have $130,000 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 1 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 $30,000. 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.) Form 1949 PG1 Form 1949 PG2 Schedule D Form 8949 Schedule D. SCHEDULED Capital Gains and Losses OMB No 1545-0074 (Form 1040) Attach to Form 1040, 1040-SR or 1040-NR. 2020 Department of the Treasury Go to www.irs.gow Schedule for instructions and the latest information Intemal Revenue Service (99) se Form 8949 to list your transactions for ines 16,2,3.81.9, and 10 Attachment Sequence No. 12 Names) shown on return Your social security number Mr. and Mrs. Howell 412-34-5670 Did you dispose of any investments) in a qualified opportunity fund during the tax year? Yes No If "Yes,"attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) See instructions for how to figure the amounts to enter on the lines (a) Asien below. to gain or los (d) Proceeds (e) Cost for other (h) Gain or loss). Subtract column (from (sales price) from Fome) basis) This form may be easier to complete if you round off cents to whole column (d) and combine the result with column dollars 8949, Part I, Ine 2,column 1a Totals for all short-term transaction reported on Fom 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 1949, leave this line blank and go to line 1 1 Totals for all transaction reported on Fomis) 8949 with Box A checked 0 2 Totais for all transaction reported on Fomis) 8949 with Box B checked 15.700 15,600 3 Totals for all transaction reported on Forms) 8949 with Box C checked 0 6,000 4 Short-term gain from Form 6252 and short-term gain or loss from Forma 4684, 6781, and 8824 4 (8,000) 5 Net short-term gain or (os) from partnerships Scorporation, estates, and trusts from Schedules)K-1 5 2,300 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions 6 7 Net short-term capital gain or (as) Combine in a through in column Oh If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Partll on the back (3,700) Part II Long-Term Capital Gains and LossesGenerally Assets Held More Than One Year (sce instructions) See instructions for how to figure the amounts to enter on the lines (a) Adjustments below. (d) Proceeds () Cost for other to gain or loss mn) Gain or loss) Subtract column (from from Form) column (d) and combine the result with column This form may be easier to complute if you round off cents to whole (sales pro) basis) 8949, Part Illine 19) dollars 2 column Sa Totals for all long-term transaction 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 1949, leave this line blank and go to in BD Totals for all transaction reported on Forms) 8949 with Box D 0 checked 9 Totals for all transaction reported on Forms) 8949 with Box E checked 295,600 211,800 10 Totais for all transaction reported on Fomis) 8949 with Box F checked 11 Gain from Form 4797. Part ; long-term gain from Forms 2439 and 6252, and long-term gain or loss) from Forma 4684.6781, and 8824 12 Net long-term gain or loss from partnerships. S corporation states, and trusts from Schedules) K-1 12 13 Capital gain distributions. See the instructions 13 900 14 Long-tem capital osa caryover. Enter the amount, if any, from line 13 of your Capital Los Carryover Worksheet in the instructions (Enter as negative) 14 15 Net long-term capital gain or loss Combineines Da through 14 in column (h). Then go to Part on the back 15 900 For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 11338H Schedule D (Form 1040 or 1040-SR) 2020 THIS FORM IS A SIMINATION OF AN OFFICIAL LIA TAY FORM IT IS NOT THE OFFICIAL FORMITSFLE DO NOT USE THE FORM FOR 11 Hawels tax lability for the year