Your reviewer has asked you to prepare a 2020 Federal income tax projection for Easter based on the

information she has provided. Your projection will be used during a meeting and discussion with Easter,

so it should be in a user-friendly format, with necessary supporting details for your manager to review

Your office is picking up a new high-profile client and you have been assigned the task of preparing her 2020 tax estimate. In the past, she used an accountant to file a tax return with her (now ex) husband, so changes in her personal circumstances, as well some significant changes in her asset holdings, have her reaching out to a professional for assistance. She wants an understanding of her estimated 2020 liability so she can project her cash flow needs for taxes and free cash for investing. Easter Bunny is a successful entrepreneur. She owns and operates a sole proprietorship gift boutique and confectionary, Magic Baskets, specializing in holiday candies and chocolates and customized gift stockings and baskets. She is recently divorced from her husband, Santa Claus. After an amicable separation the divorce was finalized in March 2020. As part of the divorce settlement Easter was awarded approximately l of all marital assets and alimony of $5,000 per month for 10 years. Almost immediately she sold $150,000 of securities to generate a down payment on a new home. She financed the remainder of the purchase with a traditional mortgage. In July 2020 she inherited a substantial amount of cash when her uncle died. She used $200,000 to purchase a duplex in the neighboring town where her mother lives. After making some minor improvements and repairs, it was rented beginning September 1st. She viewed it as a good investment that would provide her mother reliable housing well as a steady stream of prime rental income and appreciation long term; her mother currently lives downstairs and the upstairs is rented. She used $30,000 to purchase upgraded equipment for her candy business. Prior to this investment, she hadn't purchased any new equipment for close to 10 years. All the other business assets have been fully depreciated. She loaned her good friend, Tooth Fairy $10,000 to start a logistics and delivery business, but unfortunately the business did not take off and Tooth Fairy informed Easter that she would be unable to repay the debt. Finally, she invested $100,000 municipal bonds which pay interest of 2% annually. She has approximately $300,000 of her inheritance remaining. It is currently sitting in a money market account, earning nominal interest income. Once she has an idea of her 2020 tax liability, she plans to meet with a financial advisor to discuss investment options. She is also considering purchasing a new delivery vehicle for her business and a sizable donation to her alma mater. And although her grandchildren are still young, she would like to set aside some college funds for each of them. She will provide information on 2020 - to the best of her ability - via the client portal. Unfortunately, she does not have access to her 2019 return. She expects her business income to stay relatively consistent, but it entirely unsure of how the other items will impact her 2020 taxes. Your office is picking up a new high-profile client and you have been assigned the task of preparing her 2020 tax estimate. In the past, she used an accountant to file a tax return with her (now ex) husband, so changes in her personal circumstances, as well some significant changes in her asset holdings, have her reaching out to a professional for assistance. She wants an understanding of her estimated 2020 liability so she can project her cash flow needs for taxes and free cash for investing. Easter Bunny is a successful entrepreneur. She owns and operates a sole proprietorship gift boutique and confectionary, Magic Baskets, specializing in holiday candies and chocolates and customized gift stockings and baskets. She is recently divorced from her husband, Santa Claus. After an amicable separation the divorce was finalized in March 2020. As part of the divorce settlement Easter was awarded approximately l of all marital assets and alimony of $5,000 per month for 10 years. Almost immediately she sold $150,000 of securities to generate a down payment on a new home. She financed the remainder of the purchase with a traditional mortgage. In July 2020 she inherited a substantial amount of cash when her uncle died. She used $200,000 to purchase a duplex in the neighboring town where her mother lives. After making some minor improvements and repairs, it was rented beginning September 1st. She viewed it as a good investment that would provide her mother reliable housing well as a steady stream of prime rental income and appreciation long term; her mother currently lives downstairs and the upstairs is rented. She used $30,000 to purchase upgraded equipment for her candy business. Prior to this investment, she hadn't purchased any new equipment for close to 10 years. All the other business assets have been fully depreciated. She loaned her good friend, Tooth Fairy $10,000 to start a logistics and delivery business, but unfortunately the business did not take off and Tooth Fairy informed Easter that she would be unable to repay the debt. Finally, she invested $100,000 municipal bonds which pay interest of 2% annually. She has approximately $300,000 of her inheritance remaining. It is currently sitting in a money market account, earning nominal interest income. Once she has an idea of her 2020 tax liability, she plans to meet with a financial advisor to discuss investment options. She is also considering purchasing a new delivery vehicle for her business and a sizable donation to her alma mater. And although her grandchildren are still young, she would like to set aside some college funds for each of them. She will provide information on 2020 - to the best of her ability - via the client portal. Unfortunately, she does not have access to her 2019 return. She expects her business income to stay relatively consistent, but it entirely unsure of how the other items will impact her 2020 taxes