Tax Return Assignment 2
Marci Birx, age-59, is single and has no dependents. Marci had the following relevant transactions for 2020:
Wages as Walmart greeter $17,000
Federal income tax withheld 2,260
Interest income from local bank 1,450
Qualified dividends 1,155
Loss on sale of Tandem Diabetic stock (held from
11/10/2017 to 10/31/2020) -3,100
Federal income tax quarterly deposits (total) 6,500
Charitable contributions 325
Itemized deductions 11,600
Single
Family
RENTAL OPERATIONS Home Duplex
Rental income $31,900 $29,200
Interest expense 11,800 11,200
Property taxes 1,650 6,366
Maintenance 440 560
Insurance 1,260 1.465
Depreciation-Building (Line 17, Form 4562) 2,495 1,491
Depreciation-Appliances (Line 17, Form 4562) 0 0
SALE OF RENTAL RESIDENCE
Sales price (November 27, 2020)
Land (line 2, Form 4797) $ 72,000
Building (line 19A, From 4797) 48,000
Cost (October 18, 2010)
Land $ 38,000
Building 40,000
Depreciation allowed (including 2019 depreciation) 8,898
SALE OF APPLIANCES WITH RESIDENCE See Daily 9, Problem D
Sales price (line 19B, From 4797) $ 2,500
Cost (October 18, 2014) 9,000
Depreciation allowed 9,000
Complete a Form 1040 with the appropriate Schedules and Forms for 2020 for Marci Birx.
Minimum forms required:
Form 1040, Schedule 1, Schedule 3
Form 1040, Schedule B, Schedule D, Schedule E.
Form 4562, Form 4797, Form 8949 (Optional), Form 8995 (optional).
Hints:
Claim the QBI deduction for the rentals (i.e., the rentals qualify as a trade or business). Any depreciation recapture and any Sec. 1231 loss is included in QBI; any Sec. 1231 gain, is not.
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