Dave (SSN 412-34-5670) and Alicia (SSN 412-34-5671) Stanley are married and reti
ID: 2342394 • Letter: D
Question
Dave (SSN 412-34-5670) and Alicia (SSN 412-34-5671) Stanley are married and retired at age 51. The couple’s income consists of rental property, stock investments, and royalties from an invention. They sold their large house that they had purchased six years ago for $580,000 on October 18, 2017, for $1 million. They now live in a condo at 101 Magnolia Lane, Suite 15, Highland Park, FL 33853.
The rental property is an apartment complex (building cost $1.5 million and was purchased January 5, 2017) with 30 units that rent for $27,000 per month and are at 90% occupancy.
The following information is also for the year:
On January 3, 2018, Dave repurchased the exact number of shares he sold on December 29, 2017. The Stanleys paid $13,000 each quarter (four payments) in federal estimated income taxes.
Prepare Form 1040 for the Stanleys. Taxpayers had qualifying health care coverage at all times during the tax year. You will also need Schedule B, Schedule D, Schedule E, Form 4562, Form 8949 and Form 8960. (List the names of the taxpayers in the order in which they appear in the problem. Input all the values as positive numbers. Round all intermediate computations and final answers to nearest whole dollar. Instructions can be found on certain cells within the forms.)
Explanation / 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 Dave Stanley 412-34-5670 If joint return, spouse's name & initial Last name Spouse's social security number Alicia 412-34-5671 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. 101 Magnolia Lane, Suite 15, Highland Park, City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Presidential Election Campaign FL 33853. 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 social security relationship to qualifying for child tax credit • did not live with If more than four (1) First name Last name number you (see instructions) you due to divorce or separation (see instructions) dependents, see 0 instructions and 0 check here. 0 Dependents on 6c not entered above 0 Add numbers on lines above d Total number of exemptions claimed . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 2 Income 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . 7 0 8 a Taxable interest. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a 22,000 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 42,685 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. #### 13 436,000 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. 17 227,352 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 22 685,352 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 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. . . . . . 37 679,952 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2017) Form 1040 (2017) Page 2 Tax and 38 Amount from line 37 (adjusted gross income) 0 0 0 0 38 679,952 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 667,252 42 Exemptions. If line 38 is $156,900 or less, multiply $4,050 by number on line 6d. Otherwise, see instructions. 42 0 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . . . . . 43 667,252 44 Tax (see instructions). Check if any tax is from: a Form(s) 8814 b Form 4972 c 44 121,313 45 Alternative minimum tax (see instructions). Attach Form 6251 . . . . . . . . . . . . . . . . 45 12,916 46 Excess advance premium tax credit repayment. Attach Form 8962 . . . . . . . . . . . . . . . 46 • All others: 47 Add lines 44, 45, and 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 134,229 62 Taxes from: a Form 8959 b X Form 8960 c Instructions; enter code(s) 62 16,338 63 Add lines 56 through 62. This is your total tax . . . . . . . . . . . . . . . . . . . . 63 150,567 Payments 64 Federal income tax withheld from Forms W-2 and 1099 . . . . . . 64 0 65 2017 estimated tax payments & amount applied from 2016 return . 65 52,000 Amount 78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions 78 98,567 You Owe 79 Estimated tax penalty (see instructions) . . . . . . . . . . 79 0
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