Use the following information to complete Ben and Samantha Daniels 2020 federal income tax return (1040). If any information is missing, use reasonable assumptions to fill in the gaps. Assume the couple had no transactions involving virtual currency and did not receive any stimulus payments

• You will need the following forms and schedules to complete the project: Form 1040 (including Schedules 1 and 2), Schedule A, Schedule B, Schedule C, Schedule D, Schedule SE, and Forms 8949 and 8995. Do not complete any forms other than the ones listed (even if the form instructions instruct you to fill out additional forms). However, in order to compute the couple’s tax liability you may need to complete the Qualified Dividends and Capital Gain worksheet found in the 1040 instructions. You do not need to submit the worksheet. You can find all forms, schedules, and instructions on the IRS Web site (www.irs.gov). The instructions can be helpful in completing the forms.

• You may complete the return individually, or you may work in a group (no more than three people per group). Groups should turn in only one return.
• You must complete the tax return by hand using federal tax forms. (No computer-generated returns).

1. Ben and Samantha Daniels, ages 47 and 45, are married and live at 584 Thorncliffe Road, Asheville, NC 28705. Ben’s Social Security number is 111-11-1111 and Samantha’s is 222-22-2222. The Daniels have two children: Andi, age 23, and Cameron, age 19. Their Social Security numbers are 333-33-3333 and 444-44-4444, respectively. Andi is a single college student and earned $8,000 during the summer. Ben and Samantha help Andi through school by paying for her room, board, and tuition. Andi lives at home during the summer. Cameron has a physical handicap and lives at home. Cameron attends a local university and he earned $4,000 working for a marketing firm. In sum, Ben and Samantha provide more than 50% of both Andi’s and Cameron’s total support for the year.

2. Ben is an engineer for a small manufacturing firm. His salary is $95,000, from which $19,000 of federal income tax and $8,000 of state income tax were withheld. Ben also pays $2,000 of premiums for health insurance.

3. Samantha owns Sam’s Consulting, a proprietorship that does software consulting. During the year, Samantha’s gross revenues were $23,000. She incurred the following expenses in her business:

Insurance	$ 700
Software rentals	5,400
Journals and magazines	150
Training seminars	1,200
Supplies	1,300
Donations to political candidates	800
Accounting fees	600

4. Ben enjoys playing the saxophone and plays in a band. Ben’s band has developed a local following. This year, his gross revenues were $1,200 for playing shows and $700 on CD sales. He incurred the following expenses:

Studio rent expense	$1,300
Equipment repairs	200
CD production	500
New saxophone	800

5. Ben’s uncle passed away during the year. Ben and Samantha received $100,000 from the uncle’s life insurance policy. Neither Ben nor Samantha paid any of the premiums.

6. Samantha purchased 100 shares of Mangio Corporation stock on May 1, 1993, for $1,000. Mangio Corporation was declared bankrupt during the current year.

7. Cameron’s physician recommended that he see a physical therapist to help with his disability. Ben paid the therapist $7,000 during the year because his insurance would not cover the bills.

8. Ben and Samantha went to Las Vegas and won $5,000 at the blackjack table. The next night, they lost $6,000.

9. Ben and Samantha gave $900 cash to their church and, during the year, they had the following other income and expenses:

Real estate taxes	$1,400
Property taxes on car (determined by car’s value)	500
Home mortgage interest	9,000
Credit card finance charges	2,600
Interest from a savings account	800
Interest from City of Asheville bonds	700
Dividend from General Motors stock (ordinary and qualified)	400