Question

Read the case on which your Portfolio Project is based. Determine all items that will be deducted before the AGI calculation. In a MS Excel spreadsheet, list all deductible items in column A. In column B, determine where that deduction should appear on Form 1040 (for tax year 2017).

ACT405 – Portfolio Project Case 1

Comprehensive Tax Problem – Option 1

Taxpayer Information

                Name:   John Washington

                Address:   3450 Green St.

                                    Miami, FL 54321

                DOB:   5/5/1960

                Filing Status: Married

                SSN: 434-20-2020

                Occupation: Engineer

                Name: Debra Washington

                Address: 3450 Green St.

                                   Miami, FL 54321

                DOB: 7/7/1962

                Filing Status: Married

                SSN: 411-21-4568

                Occupation: Teacher

INCOME INFORMATION:

                Wages and Compensation

The following information is taken from John Washington’s 2017 Form W-2 Wage and Tax Statement:

                                               

Box 1 – Wages, tips, and other compensation	80,000
Box 2 – Federal Withholding	12,500
Box 17 – State Income Tax Withholding	2,000

                               

The following information is taken from Debra Washington’s 2017 Form W-2 Wage and Tax Statement:

                                               

Box 1 – Wages, tips, and other compensation	42,000
Box 2 – Federal Withholding	3,500
Box 17 – State Income Tax Withholding	750

                Interest and Dividends

                John had interest income from a savings account from Everest Bank of $500.00

                Debra had dividend income of $550 from Blue Co. stock.

                Capital Gains

                John had the following stock transactions in 2017:

He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2017, which he purchased on April 1, 2017 for 25,000

                Rental Real Estate

The couple owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit are as follows:

                                Rental income                                   $12,000

                                Property taxes                                $1,500

                                Depreciation                                    $1,000

                                Repairs and Maintenance             $750

                                Insurance                                            $2,000

Other Transactions in 2017

1. Debra had educator expenses in 2017 of $450.00

2. John had gambling winnings of $1,000.

3. John was the beneficiary of his mother’s life insurance policy.

His mother died in 2017 and he received $50,000 under this policy.

                4. Debra paid $700 in student loan interest.

Answer 1