Question

Comprehensive Problem Dick and Tina Bench live at 230 Main Street, Platteville, WI 53818, and their Social Security numbers are 233-43-4523 and 342-22-3476. They have one child, Tony, who is eight years old. Tony's Social Security number is 456-34-6578. Dick's salary from a night guard job and income tax withholding for the year are as follows: Wages $56,000 Interest earned on savings account 1,600 Federal income tax withheld 5,000 State income tax withheld 2,000 Dick contributed $4,000 to his IRA account. The Benches moved from Florida to Wisconsin in the beginning of the current year. Their moving expenses include (all non-reimbursed): Cost of moving furniture $3,500 Transportation costs 400 Lodging 200 Meals 160 House-hunting trip before the move 900 Tina started and managed the Istanbul Cafe. Revenue and expenses for the year are presented below: Revenue $70,000 Beginning inventory of merchandise inventory 0 Ending inventory of merchandise inventory 3,500 Merchandise supplied purchased 17,000 Wages 8,500 Utilities 1,500 Rent expenses 7,800 Advertisement expenses 2,000 Payroll taxes 680 Subcontractor 2,200 Other 500 Dick and Tina own a house in Platteville that they rent to students for $800 per month. They incur the following expenses for the year (11 months): Real estate taxes $3,000 Mortgage interest 4,200 Repairs 400 Depreciation 3,000

Answer 1

FORM 1040

Name:Dick,SS no.233-43-4523

Filing status:single

Home address:230,Main street,Platteville,WI 53818

Foreign country name:N/A

Age/Blindness:assumed born after January2,1955,not blind

Dependents:Tony,SS no.456-34-6578,Son,qualifies for chlid tax credit

1) $56000

2a)0

2b)$1600[assumed Form B attached as the interest amount exceeds$1500)

3a)0

3b)0

4a)0

4b)0

4c)0

5a)0

5b)0

6)0

7a)0

7b)$57600

8a)0

8b)$57600

9)$12200

10)0

11a)$12200

11b)$45400

12a)$5852

12b)$5852

13a)$2000(please see calculation given below)

13b)$2000

14)3852

15)0

16)$3852

17)$5000

18)0

19)$5000

20)$1148

21)$1148

22)yes{assumed}

Ccalculation of child tax credit as per work sheet for Line 13a

1)1x$2000

2)0

3)$2000

4)$57600

5)$200000

6)no,0

7)0

8)yes,$2000

9)$5852

10)0

11)No,$5852

12)No,$2000

Eligible child tax credit is $2000

*assumed that child tax credit for 2018 was allowed

Schedule C(form no,1040)

Name of the proprietor:Tina, SSN:342-22-3476

A) cafe

B)722514

C)Istanbul Cafe

D) Not applicable

E)Wisconsin

F)Cash

G) yes

H) yes

I) No

J) not applicable

Part I -Income

1) $70000

2)03)$70000

4)$13500

5)$56500

6)0

7)$56500

Part II -Expenses

8)$2000

9)0

10)0

11)$2200

12)0

13)0

14)0

15)0

16)0

17)0

18)0

19)0

20)(b)$7800

21)0

22)0

23)$680

24)0

25)$1500

26)8500

27)(a)$500

28)$23180

29)$33320

30)0

31)$33320

32)not applicable

SCHEDULE- E(Form no.1040)

Part I-income or loss from rental real estate and royalties

A) no

B) not applicable

1a)Platteville

1b)

12)11 months(QJV box Not applicable)

3)$8800

4)0

Expenses

5)0

6)0

7)0

8)0

9)0

10)0

11)0

12)$4200

13)0

14)$400

15)0

16)$3000

17)0

18)$3000

19)0

20)$10600

21)0

22)0

23)(a)($1800)

24)($1800)

25)0

26)($1800)

Note: since there is loss Form6198 must be filed