Posted: January 21st, 2021
Noah and Joan Arc live with their family at 4342 Josie Jo, Santee, CA 92071.
Noah’s SSN is###-##-####Joan’s is 45687542
Both are in their mid-30s and enjoy good health and eyesight.
Noah owns and operates a pet store and Joan is a fire-firefighter for the city.
1. The Arcs have 2 children, a son named Billie Bob (SSN 598-01-245), who is 7 years old. A daughter name Mary Sue (SSN###-##-####, who is 4 years old.
The Arcs paid $2,800 to the roundup Day Care Center to take care of Mary Sue while they worked. Because Joan is a firefighter, she was home in the afternoon to care for Billie Bob after school.
2. For the current year, Joan’s W-2 from the city fire department showed the following wages:
Federal Income tax withheld
State Income tax withheld
FICA tax withheld
Noah made some estimated federal income tax payments of $12,000 and estimated state income tax payments of $1,000 during the year.
3. Noah’s pet store is located at***** Santee, Ca, 92071. The name of the store is “The Arc,” and its taxpayer ID number is ***** The beginning inventories and ending inventories are both $10,000. The revenue and expenses for the year are as follows:
Cost of Sales
4. Noah and Joan paid the following amounts during the year (all by check):
Church donations (for which a written acknowledgement was received)
Real estate taxes on their home
Mortgage interest for purchase of home
Tax return preparation fees
Credit card interest
Automobile insurance premium
Uniforms for Joan
5. Noah likes to invest in the stock market. During the year he sold the following securities, none of which were qualified small business companies:
4,500 (Sale Price)
2,300 (Cost Price)
6,000 (Sale price)
5,000 (Cost price)
12,000 (Sale price)
1,600 (Cost price)
The expenses of sale are included in the cost basis. Noah has a long-term capital loss carryover from last year of $2,300.
6. During the year, Noah and Joan received the following qualifying dividends:
7. Noah and Joan own rental property located atXXXXX, San Diego, CA 92115.
The revenue and expenses for the year are as follows:
Depreciation (The house was acquired in 1990)
Although Noah and Joan do not believe their tax return will be unduly complicated, they do realize their limitations and come to you for assistance. You are to prepare their federal income tax return in good form, signing the return as the preparer. Do not complete a California state income tax return. Assume and other information (addresses, etc.) that you may need. The following forms and schedules are required, 2014 edition:
Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, Schedule SE, Form 2441, Form 8949, Qualified Dividends and Capital Gain Tax Worksheet.
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