Tax Return Example File a tax return based on the following information John and Jill are married and under 40 years of age John is employed as a store manager at Walmart, Inc Jill owns and operates a food stand Jill is a material participant in the business She is a cash basis taxpayer During 2019, John Jill had the following income and expense items $140,000 salary from Walmart $32,000 cash gross receipts from her food stand Checks for $6,500 related to the food stand received on 12 31 19 deposited in the following year $1,000 Interest income on City of Baltimore bonds $70,000 life insurance proceeds on the death of her sister $23,000 check given to her by her wealthy aunt Inheritance on 1 1 19 Stock with a FMV of 10,000 Sold 1 23 19 for 45,000 $8,000 Damages for personal injury (car accident) $25,600 medical expenses (unrelated to the car accident) $30,000 Bank loan (proceeds used to buy personal auto) Paid expenses connected with the Food stand Rent 11,000 Supplies 6,400 Utilities telephone 4,680 Wages 5,000 Penalties and Fines 3,500 Equipment rentals 8,000 Purchased Placed in service Office Furniture 6,500 $16,500 interest expense on a home mortgage (paid to San Jose Savings and Loan) Student loan interest paid $2,400 Sold Stock Proceeds $29,000 Cost $11,000 Purchase date 01 01 12 sale date 04 01 19 Sold Stock Proceeds $4,000 Cost $17,000 Purchase date 01 01 19 sale date 04 01 19 Non Business bad debt $3,500 Loan date 01 12 11 Bankruptcy 01 01 19 Alimony pre 2018 paid $10,000 to former wife SS 432 96 5643 Interest income of $4,500 from Money market account Dividend Income of $5,500 from Google Stock State taxes paid $6,500 Property taxes on personal residence of $10,100 Charitable contributions of $9,500 IRA contribution $3,500 Prize $800 Worthless security purchased on 12 15 13 determined worthless on 01 01 19 Cost basis 5,500 Stock Cost Basis of $6,000 sold to their daughter for $1,000 Land purchased on 1 1 12 with a Basis of 8,000,000 FMV of 10,000,000 sold on 1 1 19 in exchange for property with a FMV of 9,000,000 and cash of 1,000,000 Sale of personal residence lived in the home for past 10 years basis in the home 100,000 sold for 175,000

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Tax Return Example File a tax return based on the following information: John and Jill are married and under 40 years of age. John is

Tax Return Example

File a tax return based on the following information:

John and Jill are married and under 40 years of age. John is employed as a store manager at Walmart, Inc. Jill owns and operates a food stand. Jill is a material participant in the business. She is a cash basis taxpayer. During 2019, John & Jill had the following income and expense items:

$140,000 salary from Walmart.
$32,000 cash gross receipts from her food stand.
Checks for $6,500 related to the food stand received on 12/31/19 deposited in the following year
$1,000 Interest income on City of Baltimore bonds
$70,000 life insurance proceeds on the death of her sister.
$23,000 check given to her by her wealthy aunt.
Inheritance on 1/1/19 Stock with a FMV of 10,000 Sold 1/23/19 for 45,000
$8,000 Damages for personal injury (car accident)
$25,600 medical expenses (unrelated to the car accident).
$30,000 Bank loan (proceeds used to buy personal auto)
Paid expenses connected with the Food stand:
1. Rent 11,000
2. Supplies 6,400
3. Utilities & telephone 4,680
4. Wages 5,000
5. Penalties and Fines 3,500
6. Equipment rentals 8,000
7. Purchased/Placed in service - Office Furniture 6,500
$16,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).
Student loan interest paid $2,400
Sold Stock Proceeds = $29,000 Cost - $11,000 Purchase date 01/01/12 sale date 04/01/19
Sold Stock Proceeds = $4,000 Cost - $17,000 Purchase date 01/01/19 sale date 04/01/19
Non-Business bad debt $3,500 Loan date 01/12/11 Bankruptcy 01/01/19
Alimony pre 2018 paid $10,000 to former wife SS # 432-96-5643.
Interest income of $4,500 from Money market account
Dividend Income of $5,500 from Google Stock
State taxes paid $6,500
Property taxes on personal residence of $10,100.
Charitable contributions of $9,500.
IRA contribution $3,500
Prize $800
Worthless security purchased on 12/15/13 determined worthless on 01/01/19 Cost basis 5,500
Stock Cost Basis of $6,000 sold to their daughter for $1,000
Land purchased on 1/1/12 with a Basis of 8,000,000 FMV of 10,000,000 sold on 1/1/19 in exchange for property with a FMV of 9,000,000 and cash of 1,000,000
Sale of personal residence lived in the home for past 10 years basis in the home = 100,000 sold for 175,000