Assume the taxpayer does NOT wish to contribute to the Presidential Election Fund, unless otherwise stated in the problem. Assume all taxpayers did NOT receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency during the year. Dave (SSN 412-34-5670) and Alicia (SSN 412-34-5671) Stanley are married and file their return jointly. They have retired at the a
Chapter 12 TRP 12-2
Assume the taxpayer does NOT wish to contribute to the Presidential Election Fund, unless otherwise stated in the problem.
Assume all taxpayers did NOT receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency during the year.
Dave (SSN 412-34-5670) and Alicia (SSN 412-34-5671) Stanley are married and file their return jointly. They have retired at the age of 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, 2020, 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, 2020) with 30 units that rent for $27,000 per month and are at 90% occupancy.
| Rental income | $ 291,600 |
|---|---|
| Salaries | 115,000 |
| Payroll taxes | 8,798 |
| Real estate taxes | 18,750 |
| Interest | 45,000 |
| Repairs and maintenance | 29,000 |
| (Calculate) |
The following information is also for the year:
| 1099-INT | Old Bank | $ 22,000 |
|---|---|---|
| 1099-DIV | Dell, Incorporated Ordinary dividends | 15,250 |
| Qualified dividends | 15,250 | |
| 1099-DIV | IBM, Incorporated Ordinary dividends | 8,650 |
| Qualified dividends | 8,650 | |
| 1099-DIV | Pepsi, Incorporated Ordinary dividends | 18,785 |
| Qualified dividends | 18,785 | |
| 1099-MISC | Box 2 royalties | 152,300 |
| Purchased | Sold | Sale Price | Basis | Gain/Loss | |
|---|---|---|---|---|---|
| Dell (held 9 month) | 12/01/19 | 09/01/20 | $ 15,000 | $ 9,000 | $ 6,000 |
| Pepsi (held 4 month) | 09/01/20 | 12/29/20 | 17,000 | 25,000 | (8,000) |
| IBM (held 30 month) | 06/05/18 | 12/05/20 | 38,000 | 20,000 | 18,000 |
On January 3, 2021, Dave repurchased the exact number of shares he sold on December 29, 2020. The Stanleys paid $12,000 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 1, Schedule 2, 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. Do not skip rows while entering in Ordinary Dividends section on Part II of Schedule B and Residential rental property section on Section B of Form 4562. List the names of the properties in the order in which they appear in the problem.)
TABLE 6A-6
General Depreciation System: Straight-Line; Applicable Recovery Period: 27.5 Years; Mid-Month Convention
| Month in the First Recovery Year the Property is Placed in Service | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Recovery Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| 1 | 3.485 | 3.182 | 2.879 | 2.576 | 2.273 | 1.970 | 1.667 | 1.364 | 1.061 | 0.758 | 0.455 | 0.152 |
| 2 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 3 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 4 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 5 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 6 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 7 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 8 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 9 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 10 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 11 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 12 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 13 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 14 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 15 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 16 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 17 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 18 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 19 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 20 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 21 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 22 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 23 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 24 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 25 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 26 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 27 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 | 3.637 |
| 28 | 1.970 | 2.273 | 2.576 | 2.879 | 3.182 | 3.485 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 | 3.636 |
| 29 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.152 | 0.455 | 0.758 | 1.061 | 1.364 | 1.667 |
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