Use the following information to complete Paige Turners current year federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Any required forms, schedules, and instructions can be found at the IRS Web site (www.IRS.gov). The instructions can be helpful in completing the forms. Facts: 1. Paige Turner is single and has two children from her previous marriage. Ali lives with Paige, and Paige provides more than half of her support. Leif lives with his father; Will (Lief lived with Will for all of 2013). Will provides more than half of Leifs support. Paige pays alimony of $400 per month to Will. The payments are to continue until Leif reaches age 18, when they will be reduced to $150. Paige provides you with the following additional information: She uses the cash method of accounting and a calendar year for reporting. She wishes to contribute to the presidential election campaign. Paige lives at 523 Essex Street, Bangor, ME 04401. Paiges birthday is May 31, 1974. Alis birthday is October 5, 2003. Leifs birthday is December 1, 2001. Paiges Social Security number is 007-16-4727. Alis Social Security number is 005-61-7232. Leifs Social Security number is 004-23-3419. Wills Social Security number is 006-45-6333. She does not have any foreign bank accounts or trusts. 2. Paige is employed as a nuclear engineer with Atom Systems Consultants, Inc. (ASCI). ASCIs federal employer identification number is 79-1234466. Paiges pay stubs indicate that she had $7,230 withheld in federal taxes, $4,987 in state taxes, $4,495 in Social Security taxes, and $1,051 in Medicare taxes. ASCI has an extensive fringe benefits program for its employees. 3. Paige earned salary of $70,000 (before subtracting her 401(k) and flexible spending plan contributions). She contributed $7,000 to her 401(k) account, and she contributed $3,600 to her flexible spending account. 4. Taking advantage of ASCIs educational assistance program, during the fall Paige enrolled in two graduate engineering classes at a local college. ASCI paid her tuition, fees, and other course-related costs of $2,300. 5. Paige received free parking in the companys security garage that would normally cost $200 per month. 6. On January 15, of the current tax year, Paiges father died. From her fathers estate, she received stock valued at $30,000 (his basis was $12,000) and her fathers house valued at $90,000 (his basis in the house was $55,000). 7. Paige owns several other investments and in February received a statement fromher brokerage firm reporting the interest and dividends earned on the investments for the current tax year. (See page 3.) 8. In addition to the investments discussed above, Paige owns 1,000 shares of Grubstake Mining & Development common stock. Grubstake is organized as an S corporation and has 100,000 shares outstanding (S corp. ID number 45-4567890). Grubstake reported taxable income of $200,000 and paid a distribution of $1.00 per share during the current year. Paige tells you that Grubstake typically does not send out its K-1 reports until late April. However, its preliminary report has been consistent with the K- 1 for many years. (See page 3.) Paige does not materially participate in Grubstakes activities. 9. Paige slipped on a wet spot in front of a computer store last July. She broke her ankle and was unable to work for two weeks. She incurred $1,300 in medical costs, all of which were paid by the owner of the store. The store also gave her $1,000 for pain and suffering resulting from the injury. ASCI continued to pay her salary during the two weeks she missed because of the accident. ASCIs plan also paid her $1,200 in disability pay for the time she was unable to work. Under this plan ASCI pays the premiums for the disability insurance as a taxable fringe benefit. Forms 1099 and 1098 This is important tax information and is being furnished to the Internal Revenue Service. 1099-Div Dividends & Distributions Entity Description Amount General Dynamics Gross ordinary & qualified dividends $300 1099-Int Interest Entity Description Amount New Jersey Economic Development bonds Gross interest $300 IBM bonds Gross interest 700 State of Nebraska bonds Gross interest 200 1098-Mortgage Interest Statement Entity Description Amount Sunbelt Credit Union Mortgage interest $7,100 Northeast Bank Home-equity loan interest 435 Grubstake Mining & Development: preliminary report (preliminary K-1) to Paige for the current tax year Distribution to shareholder $1,000 Ordinary income (1% of $200,000) $2,000 10. Paige received a Form 1099-B from her broker for the sale of the following securities during the current tax year. The adjusted basis amounts were reported to the IRS. Sale Date Purchase Date Sales Price Her Basis Nebraska state bonds 03/14/current tax year 10/22/06 $2,300 $1,890 Cassill Corp (500 shares) 10/20/current tax year 02/19/11 $8,500 $9,760 11. In addition to the taxes withheld from her salary, she also made timely estimated federal tax payments of $175 per quarter. Paige would like to receive a refund for any overpayment. 12. Paige found a renter for her fathers house and started renting it on February 1, of the current tax year. The monthly rent is $400, and the lease agreement is for one year. The lease requires the tenant to pay the first and last months rent and a $400 security deposit. The security deposit is to be returned at the end of the lease if the property is in good condition. On February 1, Paige received $1,200 from the tenant per the terms of the lease agreement. In November, the plumbing froze and several pipes burst. The tenant had the repairs made and paid the $300 bill. In December, with Paige's okay, he reduced his rental payment to $100 to be compensated for the plumbing repairs. Paige provides you with the following additional information for the rental. Property taxes $770 Other maintenance expenses 285 Insurance expense 495 Management fee 350 Depreciation 2,760 The rental property is located at 35 Harvest Street, Orono, ME 04473. Local practice is to allocate 12 percent of the fair market value of the property to the land. (See #6.) Paige makes all decisions with respect to the property. 13. Paige paid $2,050 in real estate taxes on her principal residence. The real estate tax is used to pay for town schools and other municipal services. 14. Paige drives a 2011 Acura TL. Her car registration fee (based on the car year) is $50 and covers the whole current tax year. In addition, she paid $280 in property tax to the state based on the book value of the car. 15. In addition to the medical costs presented in #9, Paige incurred the following unreimbursed medical costs: Dentist $ 310 Doctor 390 Prescription drugs 215 Over-the-counter drugs 140 Optometrist 125 Emergency room charges 440 LASIK eye surgery 2,000 Chiropractor 265 16. On March 1, Paige took advantage of low interest rates and refinanced her $75,000 home mortgage with her original lender. The new home loan is for 15 years. She paid $215 in closing costs and $1,500 in discount points (prepaid interest) to obtain the loan. The house is worth $155,000, and Paiges basis in the house is $90,000. As part of the refinancing arrangement, she also obtained a $10,000 home-equity loan. She used the proceeds from the home-equity loan to reduce the balance due on her credit cards. Paige received several Form 1098 statements from her bank for interest paid by her in the current tax year. Details appear below. (See also on page 3.) Primary home mortgage $7,100 Home-equity loan 435 Credit cards 498 Car loan 390 17. On May 14, of the current tax year, Paige contributed clothing to the Salvation Army. The original cost of the clothing was $740. She has substantiation valuing the donation at $360. The Salvation Army is located at 350 Stone Ridge Road, Bangor, ME 04401. In addition, she made the following cash contributions and received a statement from each of the following organizations acknowledging her contribution: Larkin College $850 United Way 125 First Methodist Church 790 Amos House (homeless shelter) 200 Local Chamber of Commerce 100 18. On April 1, of the current tax year, Paiges house was robbed. She apparently interrupted the burglar because all thats missing is an antique brooch she inherited from her grandmother (June 12, 2004) and $300 in cash. Unfortunately, she didnt have a separate rider on her insurance policy covering the jewelry. Therefore, the insurance company reimbursed her only $500 for the brooch. Her basis in the brooch was $6,000, and its fair market value was $7,500. Her insurance policy also limits to $100 the amount of cash that can be claimed in a theft. 19. During the current tax year, Paige paid a local CPA $350 to prepare her previous year's tax return