Comprehensive Problem 4-1 Skylar and Walter Black have been married for 5 years.
ID: 2342225 • Letter: C
Question
Comprehensive Problem 4-1
Skylar and Walter Black have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a homemaker and Walter is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700-01-0002.
The Blacks incurred the following expenses during their move from Maine to Nevada in January of 2017:
The school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2. Walter’s previous job, as a high school teacher in Maine, was only 5 miles from his home. Skylar was unemployed prior to the move.
The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 183 days during 2017 and used by the Blacks for 17 days. Pertinent information about the condo rental is as follows:
The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo.
Required:
Complete Form 1040 and the schedules and forms provided for the Blacks.
If an amount box does not require an entry or the answer is zero, enter "0".
Do not round any percentages.
If required, round your answers to the nearest dollar.
If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers.
Note: Special instructions for Form 8582: If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.
Walter's earnings from teaching are:
This information is being furnished to the Internal Revenue Service.
Complete Form 1040 for Walter and Skylar Black.
2017
You Spouse
• People who check any box on line 39a or 39b or who can be claimed as a dependent, see instructions.
• All others:
Single or Married filing separately, $6,350
Married filing jointly or Qualifying widow(er), $12,700
Head of household, $9,350
Cost of moving furniture $4,775 Travel (2,988 miles at $0.17) 508 Lodging en route 520 Meals en route 90 House-hunting trip before the move 750Explanation / Answer
Form 1040 Department of the Treasury––Internal Revenue Service (99) 2017 U.S. Individual Income Tax Return OMB No. 1545-0074 IRS Use Only—Do not write or staple in this space. For the year Jan. 1--Dec. 31, 2017, or other tax year beginning ,2017, ending See separate instructions. Your first name and initial Last name Your social security number Skylar Black 222-43-7690 If joint return, spouse's name & initial Last name Spouse's social security number Walter 700-01-0002 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Make sure the SSN(s) above and on line 6c are correct. 883 Scrub Brush Street, Apt. 52B, City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Presidential Election Campaign Las Vegas, NV 89125. Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or Foreign country name Foreign province/state/county Foreign postal code refund. You Spouse Filing Status 1 Single 4 Head of household (with qualifying person). (See instructions.) 2 x Married filing joint return (even if only one had income) If the qualifying person is a child but not your dependent, enter Check only one 3 Married filing separate return. Enter spouse's SSN above this child’s name here. box. and full name here. 5 Qualifying widow(er) (see instructions) Boxes checked on 6a and 6b. 6a X Yourself. If someone can claim you as a dependent, do not check box 6a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 No. of children on 6c who: Exemptions b X Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Dependents: (2) Dependent's (3) Dependent's (4) if child under age 17 • lived with you Income 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . 7 50,674 8 a Taxable interest. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a 0 Attach Form(s) b Tax-exempt interest. Do not include on line 8a . . . . . . . . . 8b 0 W-2 here. Also 9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a 0 attach Forms b Qualified dividends . . . . . . . . . . . . . . . . . . . . . . 9b 0 W-2G and 10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1099-R if tax 11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 0 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here. #### 13 If you did not 14 Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 get a W-2, 15 a IRA distributions 15a 0 b Taxable amount . . . . . 15b 0 see instructions. 16 a Pensions and annuities 16a 25,000 b Taxable amount . . . . . 16b 0 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17 (2,800) 18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 0 19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 a Social security benefits 20a 0 b Taxable amount . . . . . . . 20b 0 21 Other income. List type and amount. 21 0 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income 22 47,874 23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Adjusted 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ 24 Gross 25 Health savings account deduction. Attach Form 8889 . . . . . . . . . . 25 0 Income 26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 0 28 Self-employed SEP, SIMPLE, and qualified plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 29 Self-employed health insurance deduction . . . . . . . . . . . . 29 30 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 0 31 a Alimony paid b Recipient's SSN 566-74-8765 31a 5,400 32 IRA deduction . . . . . . . . . . . . . . . . . . 32 0 33 Student loan interest deduction . . . . . . . . . . . . . . . 33 34 Tuition and fees. Attach Form 8917 . . . . . . . . . . . . . . . 34 35 Domestic production activities deduction. Attach Form 8903 35 36 Add lines 23 through 35 . . . . . . . . . . . . . . . 36 5,400 37 Subtract line 36 from line 22. This is your adjusted gross income. . . . . . 37 42,474 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 Form 1040 (2017) Tax and 38 Amount from line 37 (adjusted gross income) 0 0 0 0 38 42,474 Credits 39 a Check You were born before January 2, 1953 Blind. Total boxes 0 Standard if: Spouse was born before January 2, 1953 Blind. checked 39a Deduction for -- b If your spouse itemizes on a separate return or you were a dual-status alien, check here 39b • People who check any box on line 39a or 39b or who can be claimed as a dependent, see instructions. 40 Itemized deductions (from Schedule A) or your standard deduction (see left margin) . . . . . 40 12,700 41 Subtract line 40 from line 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 29,774 42 Exemptions. If line 38 is $156,900 or less, multiply $4,050 by number on line 6d. Otherwise, see instructions. 42 8,100 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . . . . . 43 21,674 44 Tax (see instructions). Check if any tax is from: a Form(s) 8814 b Form 4972 c 44 2,319 45 Alternative minimum tax (see instructions). Attach Form 6251 . . . . . . . . . . . . . . . . 45 0 46 Excess advance premium tax credit repayment. Attach Form 8962 . . . . . . . . . . . . . . . 46 • All others: 47 Add lines 44, 45, and 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2,319 Single or Married filing separately, 48 Foreign tax credit. Attach Form 1116 if required . . . . . . . . 48 0 49 Credit for child and dependent care expenses. Attach Form 2441 . . . . 49 0 $6,350 50 Education credits from Form 8863, line 19 . . . . . . . . . . 50 Married filing jointly or qualifying widow(er) 51 Retirement savings contributions credit. Attach Form 8880. . . . 51 52 Child tax credit. Attach Schedule 8812, if required . . . . . . . . 52 0 $12,700 53 Residential energy credits. Attach Form 5695 . . . . . . . . . . 53 Head of household 54 Other credits from Form: a 3800 b 8801 c 54 55 Add lines 48 through 54. These are your total credits . . . . . . . . . . . . . . . . . . . . . 55 0 $9,350 56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0 - . . . . . . . . . . . . 56 2,319 57 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 0 Payments 64 Federal income tax withheld from Forms W-2 and 1099 . . . . . . 64 4,700 Refund 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid 75 2,381 Direct deposit? 76 a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here 76a 2,381
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