Professor Patricia (Patty) Pâté is retired from the Palm Springs Culinary Arts A

Question

Professor Patricia (Patty) Pâté is retired from the Palm Springs Culinary Arts Academy (PSCAA). She is a single taxpayer and is 68 years old. Patty lives at 98 Colander Street, Henderson, NV 89052. Professor Pâté's Social Security number is 565-66-9378. Patty receives monthly retirement benefits from her PSCAA retirement plan. Earnings and income tax withholding shown on her retirement 2016 Form 1099-R are:

Patricia owns a rental condo located at 392 Spatula Way, Mount Charleston, NV 89124. The condo rents for $850 per month and was rented for the entire year. The following are the related expenses for the rental house:

The condo was purchased on August 31, 1978. Professor Pâté handles all rental activities (e.g., rent collection, finding tenants, etc.) herself.

During March 2016, Patricia took an $82,000 distribution from her 401(k) plan. Patricia received only $65,600 because the 401(k) plan administrators withheld $16,400 federal income tax from the distribution. Forty-five days after the distribution, Patricia deposited $58,000 in a rollover IRA, keeping $7,600 of the $65,600 received in order to remodel her kitchen.

Click here to access the tax table to use for this problem.

Required:

Complete Professor Pâté's federal tax return for 2016. Use Form 1040, Schedule E, and Form 8582 to complete this tax return. Do not complete Form 4562 for reporting depreciation. Make realistic assumptions about any missing data.

Note: Enter all amounts as positive numbers except for the following special instructions: If required, on Form 1040, line 17 and on Schedule E, on lines 21, 25, and 26, use the minus sign to indicate a loss . On Form 8582, if required, use the minus sign to enter a "loss" as a negative number on the lines 1d and 4. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Gross distribution and taxable amount $62,100 Federal tax withheld 7,350 State tax withheld 0

Explanation / Answer

tax return of patricia

rental income

rent (a)

Real estate taxes

-561

therefore total income=54750-5824= 48926

Gross distribution and taxable amount 62100 Federal tax withheld -7350 net distribution 54750

rental income

rent (a)

10200

Real estate taxes

-3835 mortgage interest -8613 insurance

-561

dep 0 homeowners association -1260 repairs -1195 gardening -560 total (b) -16024 a-b total of rent income -5824

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