Tax Return Problems - formerly Appendix C Individual Tax Return Problem 4 Required: Use the following information to complete Phillip and Claire Dunphy's 2019 federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem. Any required forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms.

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 flight attendant. 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, Los Angeles, California 90018.

Phillip's birthday is 11/5/1973 and his Social Security number is 321-XX-5766.

Claire's birthday is 5/12/1976 and her Social Security number is 567-XX-1258.

Haley's birthday is 11/6/2007 and her Social Security number is 621-XX-7592.

Alex's birthday is 2/1/2009 and her Social Security number is 621-XX-8751.

Luke's 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. Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.

3. 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.Page C-7

4. Phillip's full-time real estate business is named "Phillip Dunphy Realty." His business is located at 645 Grove Street, Los Angeles, California 90018, and his employer identification number is 93-3488888. Phillip's gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip's 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

5. On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip's expenditures for the new office building are as follows: Date Acquired Asset Cost 3/20 Land $ 300,000 3/20 Office building 2,500,000 3/20 Furniture 200,000 4/1 Computer system 350,000 6/1 Artwork 150,000

6. Phillip computes his cost recovery allowance using MACRS. He would like to use the 179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed 179 or bonus depreciation before. The assets Phillip sold on March 20 are as follows: Date Acquired Asset Sales Price Original Cost Accumulated Depreciation as of Beginning of the Year 5/1/13 Office building $940,000 $900,000 $129,825 5/1/13 Land 150,000 100,000 0 7/1/13 Furniture 50,000 239,000 206,998 8/13/15 Furniture 10,000 324,000 222,782 4/12/16 Office equipment 100,000 120,000 67,524 5/13/18 Computers 30,000 50,000 10,000

7. Phillip has never sold any assets relating to his business before this transaction

8. The Dunphys sold 60 shares of Fizbo Corporation common stock on September 3 for $65 a share (minus a $50 total commission). The Dunphys purchased the stock on November 8, 2018, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2012, as an investment.

9. The Dunphys filed their 2018 federal, state, and local returns on April 13, 2019. They paid the following additional 2018 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.Page C-8

10. The Dunphys made timely estimated federal income tax payments of $10,000 each quarter during 2019. They also made estimated state income tax payments of $1,000 each quarter and estimated city income tax payments of $300 each quarter. The Dunphys made all fourth-quarter payments on December 31, 2019. They would like to receive a refund for any overpayments.

11. Phillip and Claire have qualifying insurance for purposes of the Affordable Care Act (ACA).

Tax Return Problems - formerly Appendix C Individual Tax Return Problem 4 Required: . Use the following information om uillip and Claire Dupy 2018 finderal income tax retum. If any infomatis miting, we remptions to fill in Beetheatematve minimum tax for this problem Any required fo, schedules, and it can be found the che is. The can be helpful in completing the Facts: 1. Pullip and Canada filatum is simples thing is an ind Chair have the depende children. All the child live them with and Chatheniny They provide you with the flowing additional information The unde se conto the delection campaign The Du Brighton Ave, Los Angeles, Cam Philiday is 11/1973 and his Social Security is 321 XX-9766 Claessay is 51131975 Social Security bei 567.X-125 Haley's Hirthday is 5/6/2007 der Social Security amoris 21.XX7992 Alexa 1/2009 and her Social Security whers 1-XX-231 L's hity is 12122013 and Social Security numeris 1-XX0236 The Champs de not have a fuga hark colors 2 Chaise bandar Water Anna AWAAI Whether 55.000 inary, WAA withheld feel of 56.175.incones 51.100, Los city income tax of 5675. Social Security tax of 3.50 Media 3. Mature received 10 of State Sot They also mited dividendf5395 on jolly weak in Xila Corporatie 4. Phillip's time real estate in sumed Phillip Dunphy Realty located W638 Grove Street, Los Angeles, Califosilk and his employer identificationumber is 03-3488. Pillip's mots during the year we $70,000. Phillip the cash method of counting for his hin. Pig'shion 60 20 2.100 M Puede D Yabac On March 2010 only conclufio. Phillip the wilding and is filippines the wholding Dale Acquired A Gul 220 3000 130 Offioidung 250.000 320 200,000 471 Computer 3000 61 Arar 1500 Phillip computers and everyone w MACRS would be to the $179 immediate expeming, but he has lector not claimed Phillipas never claimed $119 ob peciation before the Milli March 20 are as follows Sales Original Acad Deprecation of Acquired AN Price Cost Iraning of the Year 341/13 Oli 5940,000 $900,000 5129 building 31/3 Land 150.000 100.000 7/1/13 Furniture 50.000 200.000 306.7 23/13 Fumu 10000324.000 m7 4/12/16 Othe 100.000 120,000 67.534 equipment 51 MIX Computers 30.000 50.000 10.000 Date 7. Phillip has never sold any es relating to his busineb this traccio The Deso Como Se for misa The Duhethemet per 30,2 9.2013. for sure. They Made Claire The Duplo el 13.2009 one comes 25 de 575C pued the following address 10. They make my depofi0.000 que daring 2019. They feath que se i 30. The Daily made all for December 31, 2016. They would therefusil for all over 11. Mind Claire appel Adalet KACA)