Required:

• Use the following information to complete Phillip and Claire Dunphys 2020 federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps.

Facts:

1. Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a homemaker. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.

The Dunphys provide you with the following additional information:

• The Dunphys do not want to contribute to the presidential election campaign.
• The Dunphys live at 3701 Brighton Avenue, Miami, Florida 33166.
• Phillips birthday is 11/5/1973 and his Social Security number is 321-XX-5766.
• Claires birthday is 5/12/1976 and her Social Security number is 567-XX-1258.
• Haleys birthday is 11/6/2007 and her Social Security number is 621-XX-7592.
• Alexs birthday is 2/1/2009 and her Social Security number is 621-XX-8751.
• Lukes birthday is 12/12/2013 and his Social Security number is 621-XX-9926.
• The Dunphys do not have any foreign bank accounts or trusts.

2. Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.

3. Phillips full-time real estate business is named Phillip Dunphy Realty. His business is located at 645 Grove Street, Miami, Florida 33166, and his employer identification number is 93-3488888. Phillips gross receipts during the year were $350,000. Phillip uses the cash method of accounting for his business. Phillips business expenses are as follows:

Advertising	$ 5,000
Professional dues	800
Professional journals	200
Employee wages	48,000
Insurance on office contents	1,120
Accounting services	2,100
Miscellaneous office expense	500
Utilities and telephone	3,360
Payroll taxes	3,600
Depreciation	To be calculated

4. On March 20, Phillip moved his business into a newly constructed and equipped office on Grove Street. Phillips expenditures for the new office building are as follows:
5. Phillip computes his cost recovery allowance using MACRS. He elects NOT to use 179 immediate expensing or any bonus depreciation. Phillip has never claimed 179 or bonus depreciation before.

Date Acquired	Asset	Cost
3/20/20	Land	$ 200,000
3/20/20	Office building	500,000
3/20/20	Furniture	100,000
4/1/20	Computer system	50,000

6. Phillip also has office equipment that was originally purchased in 2017. He has been using MACRS (7-year property) and the half-year convention since the original purchase:

Date Acquired	Asset	Original Cost	Accumulated Depreciation as of Beginning of the Year
4/12/17	Office equipment	80,000	45,016

7. Phillip uses his 2017 Honda Pilot to show properties to his clients. The car was originally placed in service on July 1, 2017. In 2020 he used the car 4,000 miles commuting to and from work, 16,000 miles for business and 6,000 miles other (personal).

8. The Dunphys contributed $6,000 each to a traditional IRA.

9. The Dunphys paid $1500 per month ($18,000) for family health insurance coverage.

10. The Dunphys made timely estimated federal income tax payments of $10,000 each quarter during 2020

11. Assume the Dunphys take the standard deduction in 2020.