Stanley and Melba Clark

Stanley J. (age 46) and Melba M. (age 38) Clark are married and have two children, Shelby J. (age11) and Robbie C. (age 22).All parties reside at 105 Woody Lane, St. Louis, MO 58405.Relevant Social Security numbers are listed below:

Stanley121-78-2345;Melba142-12-6789;Shelby457-66-7890; Robbie 256-57-6543

Stanley is the manager of a commercial printing company, ProPrint.Information from his Form W-2 for 2017 is provided.The Clarks have other income for 2017as provided on separate 1099 forms.Stanley and Melba provide over one-half the support for each of the two children, and the children live with the parents.

Robbie is a full-time student at the local state university and works part-time (2017 wages equal $6,653).Robbie began his senior year in the Fall semester of 2017.Stanley and Melba paid the following amounts with respect to Robbie's college education:

Spring Semester 2017 (paid Jan. 10, 2017)Fall Semester 2017 (paid August 15, 2017)Tuition$2,488;books $707Tuition$2,605; Books $832

Activity fee$50;parking$40Activity fee$50;parking$40

Stan and Melba (who both have college degrees) took a night class at Iguana College during 2017.Stan's class related to his work; Melba took an art class was for enjoyment.Each paid $450 for tuition, and Stan paid $95 for his book, while Melba paid $75 for her supplies.

In order to be gainfully employed, Stanley and Melba pay Jackie Tripp $4,234 to care for Shelby during after school hours.Jackie (Social Security number 777-77-3737) is a nearby neighbor who is retired and has no children of her own.Jackie's address is 400 Archway Dr., St. Louis, Missouri 58403.

Melba's father, Jackson B. Jones (Social Security number 256-78-9089), is age 68 and his only source of income is his Social Security benefits of $11,237 and $1,800 of interest and dividends from investments.He lives in a nursing home (located in nearby Flagstaff, MO), and Stan and Melba provide 58% of his living costs.

Melba paid $2,360 of alimony to her previous husband, Jacob, from whom she divorced many years ago.There are no children from this marriage.Jacob's Social Security number is 262-98-5421.

The Clarks installed new energy efficient windows and doors in their older home on 8/12/2017, at a cost of $8,900.

During the year, Stan attended a five-day conference sponsored by the Printers Association in Seattle, WA to learn more about computer viruses and their affect on computerized printing equipment.Because he had never visited the northwest, Stan took two days of his vacation time to tour that city's sites.His employer reimbursed him for $500 of his expenses.In addition to air fare of $259, his expenses for the seven-day trip were as follows:

Seminar fee$864Taxi fares, tips$161

Guided tours$86Hotel$576

Meals$611

Other job related expenses for Stan included:

Gifts to clients (each under $25)$206Gift to secretary$35

Business lunches involving clients$374Subscriptions to professional journals$150

Birthday gift to the vice-president

(i.e., Stan's boss)$168Dues to professional associations$206

All of these expenses are properly substantiated and supported by receipts.

On January 11, 2017, Stan purchased a new gas/electric hybrid automobile.During 2017, the auto was used as shown below:

Miles Driven:Business, 2,672;Commuting (15 miles round-trip), 4,320; Charitable, 691; Personal, 8,294.

Stan maintains a log which reflects this mileage.He has used the standard mileage rate in the past, but wonders about the actual cost method, because someone told him he could deduct depreciation on his new car.Other actual expenses related to his car were: license, $35; insurance, $739, gasoline, $932, and maintenance, $65.

To buy the automobile, Stan took out a home equity loan of $29,952 on their personal residence.At the time of the loan, the residence's fair market value was $195,840 and the principal on the first mortgage was $172,800.Interest is reported on a Form1098.

Melba owns and operates a cash basis cleaning service under the business name of "Maid-to-Deliver."Employer identification number is 87-0767432..The business address is 90 Clean St., St. Louis, MO 58403.

The results of "Maid-to-Deliver" for 2017 are as follows:

Sales Revenue$167,752

Salaries (to employees)72,576

Payroll taxes14,515

Software3,406

Office Supplies2,117

Business phone (separate line & tolls)907

Advertising3,629

Occupation tax190

Property insurance1,210

Shop rent18,144

Utilities2,506

Other information relating to Maid-To-Deliver:Melba does not maintain any inventories.She does not have a separate business auto, but she did use her personal automobile for 1,100 business miles per month (annual commuting mileage is 4, 950; and other mileage is 8,250).Melba has written documentation for the business use and she uses the standard mileage rate each year.The automobile was placed in service on 5/20/09.On August 1, 2014, Melba acquired office furniture and chairs to set up a reception area at a total cost of $36,288.On March 15, 2017, Melba purchases a $6,240 state-of-the-art computer workstation to use 100% in her business.She would like to deduct as much of its cost as possible in the current tax year.

Stan and Melba would both like to contribute the maximum amount to their Roth IRAs.Stan is covered by a qualified pension plan at ProPrint; Melba has no other pension plans.

On 9/10/10, Melba purchased 200 shares of LIZ Corp. stock, a late dot com startup,for $2,520.The stock market and the company did poorly in 2017 causing the company to fold.LIZ Corp. stock was declared worthless on 8/15/11. Melba did better on another investment, and sold 1000 shares of ARD Inc. stock on 12/05/11 for $6,624 (commission of $65).Melbapurchased the stock on 9/2/10 for $3,216 (commission of $34).Stan, however, invested $4,500 in a IPO of a small start-up company, GECKO Corp. (a 1244 company) on November 2, 2015; the company did not do well, and Stan sold the stock for $500 (commission of $35) on September 26, 2017.

On June 20, 2017, the Clarks sold their SALA Inc. stock for $14,292 (commission of $148).Stanley and Melba had received this stock as a gift from Melba's dad on November 25, 2015 when its fair market value was $10,886.Melba's Dad has purchased the stock on January 14, 2013 for $12,096 (commission of $98). Stan also received 50 shares of MANDER Co. as a 10% nontaxable stock dividend on January 14, 2017, and he sold all 50 shares on April 10, 2017 for $1,522 (commission of $35).He had purchased 500 shares of MANDER Co. on August 3, 2016 for $10,423 (commission of $75).

Stan inherited 20 acres of land in Eastern Montana from his parents when they died on 8/20/09.His parents had acquired the land on 6/25/01 for $5,000.The land's fair market value on 8/20/09 was $12,000.Stan sold the 20 acres on 5/15/11 for $24,500 (real estate commission of $1,470).

Because Stan's employer only provides health insurance coverage for himself and the children, Melba paid $4,536 in 2017 for her own health insurance coverage.Other expenses incurred by the Clarks in 2017 are summarized below:

Doctors, clinics, hospitals $ 8,054

Prescription medicine2,117

Charitable contributions

(documentation received)1,663

Interest on consumer purchases1,008

State income taxes (paid in 2017

for tax year 2016)346

United Way contribution288

Mortgage interestsee 1098

Property taxes on home4,838

With respect to the 2017 medical expenses, the Clarks received a total of $5,907 of insurance reimbursements in 2017.Melba also treated herself to cosmetic surgery during the year; she had a $3,100 face lift.Melba would like to take this as a business expense rather than a medical expense because she feels that a youthful appearance is good for sales.

In addition to the cash contribution above, on July 7, 2017, the Clarks donated used furniture and clothing to The Mercer County Rescue Mission, 356 Gateway Blvd., St. Louis, MO 58556.They estimate the original cost of this property was $4,838.The value they would have received if they sold it at a yard sale was $461.Stan also donated a Mexican gun collection (bought on May 1, 1999 for $3,500) to the Greenville Arms Museum on July 3, 2017.The collection had a FMV of $6,000 on the date of donation (based on a professional appraisal which cost $75).

On August 30, 2017 the Clarks discovered that someone had broken into their home while they were away on vacation.Guns and cash were stolen.The cost (and FMV in paren.) of the stolen property was: guns $3,300 ($2,100), and $1,500 in cash. Homeowner's insurance reimbursed $1,000 for the guns and nothing for the cash (they did not have FMV replacement insurance and the policy capped losses at $1,000 for each category).

In 2017, the Clarks receive a refund of 2016 state income taxes in the amount of $680.They have itemized for the last several years and such deductions have exceeded their standard deductions by at least $1,890 in each of those years.

Stan also inherited a mountain cabin from his parents when they died which he rents out during the year.His parents had paid $50,000 ($5,000 allocated to land) for the cabin when they bought it on 9/12/97; its FMV was $80,000 ($10,000 allocated to land) at the time of their death on 8/20/09.Stan actively manages the rental and rented it for 11 weeks (77 days) during 2017.The house has always been a rental property, but in 2017 the Clarks used the property for their personal vacation for three weeks (20 days).It is located at 105 Ridgeway Drive, Canyon City, CO 80032.For 2017, they had the following income and expenses with respect to the rental property:

Rents collected$15,781

Advertising4,816

Cleaning and maintenance905

Insurance1,005

Repairs1,554

Taxes2,980

Miscellaneous84

During 2017, he purchased new carpet for the cabin on May 6 costing $1,900; and installed a new energy efficient furnace on July 20 costing $7,500.

Timely estimated federal income tax payments of $3,000, state income tax payments of $900, and local income tax payments of $200 were paid each quarter.In addition, an overpayment on their Federal tax return of $1,210 from 2016 was applied to 2017.

Required:

Prepare the Clark's 2017 tax return, in good form, with working papers.The Clarks would like any overpayment of taxes this year applied to 2018.Both of the Clarks want $3 to go to the Presidential Election Campaign Fund.