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Question: Derrick and Ani Jones are married taxpayers, filin...
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Derrick and Ani Jones are married taxpayers, filing jointly and have a son named Jackson. They live at 474 Rustic Drive, Spokane, WA 99201. Derrick works as the director of information systems at Washington Community College District (WCCD). Ani is a stay-at-home mom. Their SSNs are Derrick, 412-34-5670; Ani, 412-34-5671; and Jackson, 412-34-5672. Their birth dates are as follows: Derrick, June 7, 1976; Ani, March 20, 1977; and Jackson, October 10, 2009. The Joneses own their home and paid $15,000 in mortgage interest during the year to Chase Bank and property taxes of $3,200. Assume they have no other deductible expenses.
The Form W-2 Derrick received from WCCD contained the following information:
| Wages (box 1) | = | $79,002.50 |
| Federal W/H (box 2) | = | $8,000.14 |
| Social security wages (box 3) | = | $79,002.50 |
| Social security W/H (box 4) | = | $ 4,898.16 |
| Medicare wages (box 5) | = | $79,002.50 |
| Medicare W/H (box 6) | = | $1,145.54 |
In addition, the Joneses own a small four-unit rental at 12345 Rainbow Way, Sultan, WA 98294. The rental was purchased and placed in service on July 1, 2003, and was rented for the entire year. The following income and expense information relates to the rental activity. For the purpose of this return problem, do not consider passive activity rules or limitations.
| Rental income | $24,000 |
| Real estate taxes | 2,000 |
| Utilities | 1,500 |
| Mortgage interest | 3,800 |
| Depreciation | 7,200 |
| Repairs and maintenance | 1,300 |
Prepare the Joneses' federal tax return for 2015. Use Form 1040, Schedule A, Schedule E, and any other appropriate schedules. Assume they do not qualify for any credits (although they may). If using tax software, the software will calculate Child Tax Credit automatically. The taxpayers had qualifying health care coverage at all times during the tax
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