profileAnyelis Diaz

 

Group 4: Comprehensive Problems

  • 1.  Trish Himple owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. Trish keeps her books on an accrual basis. The income and expenses for the year are:
    08239 08 unf34 t2Trish’s bookkeeper has provided the following book-basis fixed asset rollforward:
    08239 08 unf35 t2Enlarge ImageThe truck is not considered a passenger automobile for purposes of the luxury automobile limitations.
    Trish also has a qualified home office of 250 sq. ft. Her home is 2,500 sq. ft. Her 2014 purchase price and basis in the home, not including land, is $100,000 (the home’s market value is $150,000). She incurred the following costs in 2019 related to the entire home:
    Utilities$2,800Cleaning900Insurance1,100Property taxes2,000Required: For tax purposes, Trish elected out of bonus depreciation in all years except 2019. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule above. Complete Trish’s Schedule C, Form 8829, and Form 4562 (as necessary). Make realistic assumptions about any missing data.
    Form 8829 shows Expenses for Business Use of Your Home. The form is divided into five sections. The header from left to right shows the following information: Form 8829, Department of the Treasury, Internal Revenue Service (99), Expenses for Business Use of Your Home, File only with Schedule C (Form 1040). Use a separate Form 8829 for each home you used for business during the year, Information about Form 8829 and its separate instructions is at www.irs.gov/form8829, OMB No. 1545-0074, 2019, Attachment sequence No. 176, Name(s) of proprietor(s), and Your social security number. Second section, Part I: Part of Your Home Used for Business shows to be filled-in fields for the following: Area used regularly and exclusively for business, regularly for daycare, or for storage of inventory or product samples (see instructions). Total area of home. Divide line 1 by line 2. Enter the result as a percentage. For daycare facilities not used exclusively for business, go to line 4. All others, go to line 7. Multiply days used for daycare during year by hours used per day 4 hr. Total hours available for use during the year (365 days x 24 hours) (see instructions). Divide line 4 by line 5. Enter the result as a decimal amount. Business percentage. For daycare facilities not used exclusively for business, multiply line 6 by line 3 (enter the result as a percentage). All others, enter the amount from line 3. The third section shows, Part II: Figure Your Allowable Deduction shows to be filled-in fields for the following: Enter the amount from Schedule C, line 29, plus any gain derived from the business use of your home, minus any loss from the trade or business not derived from the business use of your home (see instructions) See instructions for columns (a) and (b) before completing lines 9–21. Line from 9 to 12 should be answered in a table against the lines. The column headers are (a) Direct expenses and (b) Indirect expenses. Casualty losses (see instructions). Deductible mortgage interest (see instructions).Real estate taxes (see instructions). Add lines 9, 10, and 11. Line 13 should be answered under (b) Indirect expenses. multiply line 12, column (b) by line 7. Add line 12, column (a) and line 13. Subtract line 14 from line 8. If zero or less, enter -0- 15. line from 16 to 22 should be answered under (a) Direct expenses and (b) Indirect expenses. Excess mortgage interest (see instructions).Insurance. Rent, Repairs and maintenance ,utilities, Other expenses (see instructions), Add lines 16 through 21, Lines 23, 24, 28, 29, and 30 should be answered under (b) Indirect expenses, Multiply line 22, column (b) by line 7, Carryover of prior year operating expenses (see instructions), Add line 22, column (a), line 23, and line 24. Allowable operating expenses. Enter the smaller of line 15 or line 25. Limit on excess casualty losses and depreciation. Subtract line 26 from line 15. Excess casualty losses (see instructions). Depreciation of your home from line 41 below. Carryover of prior year excess casualty losses and depreciation (see instructions) . Add lines 28 through 30. Allowable excess casualty losses and depreciation. Enter the smaller of line 27 or line 31. Add lines 14, 26, and 32. Casualty loss portion, if any, from lines 14 and 32. Carry amount to Form 4684 (see instructions). Allowable expenses for business use of your home. Subtract line 34 from line 33. Enter here and on Schedule C, line 30. If your home was used for more than one business, see instructions. Fourth section, Part III: Depreciation of Your Home shows to be filled-in fields for the following: Enter the smaller of your home’s adjusted basis or its fair market value (see instructions). Value of land included on line 36. Basis of building. Subtract line 37 from line 36 Business basis of building. Multiply line 38 by line 7. Depreciation percentage (see instructions). Depreciation allowable (see instructions). Multiply line 39 by line 40. Enter here and on line 29 above 41. Fifth section, Part IV: Carryover of Unallowed Expenses to 2019 shows to be filled-in fields for the following: Operating expenses. Subtract line 26 from line 25. If less than zero, enter -0- Excess casualty losses and depreciation. Subtract line 32 from line 31. If less than zero, enter -0. A foot note below the form reads, “For Paperwork Reduction Act Notice, see your tax return instructions, Cat. No. 13232M, Form 8829, (2019)” A watermark on the form reads, “DRAFT AS OF July 5, 2019 DO NOT FILE.”Enlarge Image
  • 2.Lisa Kohl (birthdate 02/14/1953) is an unmarried high school principal. Lisa received the following tax documents:
    A W-2 form is divided into two panels. The first panel contains a to f sections and they are as follows: a. employee’s social security number (highlighted): 467-98-9784, b. employer identification number (EIN): 56-1357924, c. employer’s name, address, and ZIP code: Shawnee Mission School District, 8200 W seventy first street, Shawnee Mission, K S 66204, d. control number, e. employees’ first name, initial, and last name (Lisa Kohl), and f. employees’ address and ZIP code. The second panel contains 1 to 20 sections and they are as follows: 1. Wages, tips, other compensation (highlighted): 56,640, 2. Federal income tax withheld (highlighted): 6,100, 3. Social security wages: 59,000, 4. Social security tax withheld: 3,658, 5. Medicare wages and tips: 137,677.00, and 6. Medicare tax withheld: 1,996.32, 7. Social security tips, 8. Allocated tips, 9, 10. Department care benefits: 5,000.00, 11. Nonqualified plans, 12a. See instruction for box 12: C, 2,360.00, 12 b: DD, 9,800.00, 12 c: blank. 12 d: Blank, 13. (Each option is followed by a tick box) Statutory employee, Retirement plan, and Third-part sick pay (Retirement plan is checked), 14. other, 15. State, employee’s state I D number: K S, blank, 16. state wages, tips, etc.: 56,640.00, 17. state income tax: 1,150.00, 18. local wages, tips, etc.: blank, 19. local income tax: blank, and 20. locality name: blank. A foot note below the form reads, “Form W-2 Wage and Tax Statement, Copy B—To Be Filed With Employee’s FEDERAL Tax Return, This information is being furnished to the Internal Revenue Service, 2019, Department of the Treasury—Internal Revenue Service.” A 1099-INT form. The form is divided into two parts. The first part shows the following filled-in fields: Payer’s name, street address, city or town, state or province, country, ZIP, or foreign postal code, and telephone no.: information about Olanthe National Bank; Payer’s federal identification number: 60-765 4321; Recipient’s identification number: 266-51-1966; Recipient’s name: Lisa Kohl; street address (including apt. no): 212 Quivira Road; city or town, state or province, country, and ZIP or foreign postal code: Overland Park, K S 66210. The to be filled-in fields for this part are FATCA filling requirement (tick box), and account number (see instructions). The part two shows the filled-in field for 1. Interest income: $337.54. The to be filled-in fields are as follows: Payer’s RTN (optional), 2. Early withdrawal penalty, 3. Interest on U.S. Savings Bonds and Treas. Obligations, 4. Federal income tax withheld, 5. Investment expenses, 6. Foreign tax paid, 7. Foreign country or U.S. possession, 8. Tax-exempt interest, 9. Specified private activity bond interest, 10. Market discount, 11. Bond premium, 12. Bond premium on Treasury obligations, 13. Bond premium on tax-exempt bond 14. Tax-exempt and tax credit bond CUSIP no., 15. State, 16. State identification no., and 17. State tax withheld. A note on the side of the form reads, “Interest Income, Copy B, For Recipient: This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.” A foot note below the form reads, “Form 1099–INT; (keep for your records); www .irs.gov/form1099int; Department of the Treasury - Internal Revenue Service.”An image shows the form 1099- DIV. The form is divided into two parts. The first part shows the following filled-in fields: Payer’s name, street address, city or town, state or province, country, ZIP, or foreign postal code, and telephone no.: information about Grape Large Cap Index Fund; Payer’s federal identification number: 24-1234567; Recipient’s identification number: 313-44-5454; Recipient’s name; street address (including apt. no); city or town, state or province, country, and ZIP or foreign postal code. The to be filled-in fields for this part are FATCA filling requirement (tick box), and account number (see instructions). The part two shows the filled-in fields for 1a. Total ordinary dividends $1,658.00, 1b qualified dividends $1,600.00, and 2a. Total capital gain distr.: 200.00. The to be filled-in fields are as follows: 2b Unrecap. Sec. 1250 gain, 2c. Section 1202 gain, 2d. Collectibles (28%) gain, 3. Nondividend distributions, 4. Federal income tax withheld (highlighted), 5. Investment expenses, 6. Foreign tax paid, 7. Foreign country or U.S. possession, 8. Cash liquidation distributions, 9. Non cash liquidation distributions, 10. Exempt-interest dividends, 11. Specified private activity bond interest dividends, 12. State, 13. State identification no., and 14. State tax withheld. A note on the side of the form reads, Dividends and distributions, Copy B, For Recipient: This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported. A foot note below the form reads, Form 1099-DIV; (keep for your records); www.irs.gov/Form1099DIV; Department of the Treasury - Internal Revenue Service.During the year, Lisa paid the following amounts (all of which can be substantiated):
    Home mortgage interest reported on Form 1098 (not shown)$9,540KS state income tax payment for 2018$475MasterCard interest550Life insurance (whole life policy)750Property taxes on personal residence1,525Blue Cross medical insurance premiums250Other medical expenses780Income tax preparation fee300Charitable contributions (in cash)750Lisa’s sole stock transaction was reported to her on a Form 1099-B:
    08239 08 unf38 t2On January 28, 2019, Lisa sold land for $175,000 (basis to Lisa of $130,000). The land was purchased 6 years ago as an investment. She received $25,000 as a down payment and the buyer’s 10-year note for $150,000. The note is payable at the rate of $15,000 per year plus 8 percent interest. On January 28, 2020, the first of the ten principal and interest payments is due.
    Lisa also helps support her father, Jay Hawke, who lives in a nearby senior facility. Jay’s Social Security number is 433-33-2121. Lisa provides over one-half of Jay’s support but Jay also has a pension that paid him income of $14,000 in 2019. His Social Security benefits were $3,200 in 2019.
    Required: Complete Lisa’s federal tax return for 2019. Use Form 1040-SR, Schedule A, Schedule B, Schedule D, Form 8949, the Qualified Dividends and Capital Gain Tax Worksheet, and Form 6252 as needed to complete this tax return. Make realistic assumptions about any missing data.
    Form 1040 shows Profit or Loss from Business. The form is divided into seven sections. The header from left to right shows the following: Schedule C (Form 1040), Department of the Treasury Internal Revenue Service (99). Profit or Loss From Business (sole proprietorship), Information about Schedule C and its separate instructions is at www.irs.gov.schedulec; Attach to Form 1040, 1040NR, or 1041; partnerships generally must file form 1065, OMB No. 1545-0074, Attachment sequence No. 09. Second section shows to be filled-in fields for the following and line B is highlighted. Name of proprietor. Principal business or profession, including product or service (see instructions). Enter code from instructions: (Entry field). Business name. If no separate business name, leave blank. Employer ID number (EIN), (see instr.): (Entry field). Business address (including suite or room no), City, town or post office, state and Zip code. The options for the lines F,G, I, and J are preceded by a tick box each. Accounting method: (1) Cash, (2) Accrual, (3) Other (specify). Did you “materially participate” in the operation of this business during 2019? If “No” see instructions for limit on losses Yes; No. If you started or acquired this business during 2019, check here. Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) Yes; No. If “Yes” did you or will you file required Forms 1099? Yes; No. Third section,Part I – Income shows to be filled-in fields for the following: Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the “Statutory employee” box on that form was checked. An arrow from the line points to a tick box. Returns and allowances. Subtract line 2 from line 1. Cost of goods sold (from line 42). Gross profit. Subtract line 4 from line 3. Other income, including federal and state gasoline or fuel tax credit or refund (see instructions). Gross income. Add lines 5 and 6. Fourth section, Part II – Expenses shows to be filled-in fields for the following: Advertising. Car and truck expenses (see instructions). commissions and fees. Contract labor (see instructions). Depletion. Depreciation and section 179 expense deduction (not included in Part III) (see instructions). Employee benefit programs (other than health). Insurance (other than health). Interest: a Mortgage (paid to banks, etc.). b Other. Legal and professional services. Office expense (see instructions). Pension and profit-sharing plans. Rent or lease (see instructions): Vehicles, machinery and equipment. Other business property Repairs and maintenance. Supplies (not included in Part III). Taxes and licenses. Travel, meals and entertainment: Travel Deductible meals and entertainment (see instructions). Utilities. Wages (less employment credits). 27a. Other expenses (from line-48). Reserved for future use. Total expenses before expenses for business use of home. Add lines 8 through 27a. Tentative profit or (loss). Subtract line 28 from line 7. Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filters only: enter the total square footage of: (a) your home: [Blank write-on line] and (b) the part of your home used for business: [Blank write-on line]. Use the simplified method worksheet in the instructions to figure the amount to enter on line 30. Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both form 1040, line 12(or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Form 1040, line 12, for Form 1040NR, line 13) and on Schedule SE, line 2. If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6196. Your loss may be limited. The lines 32a and 32b is preceded by a tick box each. 32 a. All investment is at risk. 32 b. Some investments is not at risk. A foot note below the form reads, “For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P, Schedule C (Form 1040) 2019.”Enlarge ImageContinuation of form 1040 shows Profit or Loss from Business. Part III – Cost of Goods sold shows to be filled-in fields for the following: The options for the lines 33 and 34 are preceded by a tick box each. Method(s) used to Value closing inventory: a. Cost, b. Lower of cost or market, and c. Other (attach explanation). Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If “Yes” attach explanation Yes; No. Inventory at beginning of year. If different from last year’s closing inventory, attach explanation. Purchases less cost of items withdrawn for personal use. Cost of labor. Do not include any amounts paid to yourself. Materials and supplies. Other costs. Add lines 35 through 39. Inventory at end of year. Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4. Sixth section, Part IV – Information on Your Vehicle shows to be filled-in fields for the following: Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file form 4562 for this business. See the instructions for line 13 to find out if you must file form 4562. When did you place your vehicle in service for business purposes? (month, day, year). Of the total number of miles you drove your vehicle during 2019, enter the number of miles you used your vehicle for: a. Business, b. Commuting (see instructions), c. Other. The options for the lines from 45 to 47 are preceded by a tick box each. Was your vehicle available for personal use during off-duty hours? Do you (or your spouse) have another vehicle available for personal use? 47a. Do you have evidence to support your deduction? If “Yes” is the evidence written? Seventh section, Part V – Other Expenses shows to be filled-in fields for the following: List below business expenses not included on lines 8-26 or line 30. Total other expenses. Enter here and on line 27a. A watermark on the form reads, “DRAFT AS OF August 7, 2019 DO NOT FILE.”Enlarge ImageThe header of Form 1040-SR shows the following information from left to right: Form 1040-SR, Department of the Treasury- Internal Revenue Services, U S Tax Return for Seniors (99) 2019, ONM 3 No. 1545-0074. The first section, Filing status (check only one box), shows the following: (each option is preceded by a tick box) 1. Single 2. Married filing jointly 3. Married filing separately (MFS) 4. Head of household (HOH) 5. Qualifying widow(er) (QW) If you checked the MFS box, enter the name of spouse. If you checked the HOH or QW box, enter the child’s name if the qualifying person is a child but not your dependent. The second section shows to be filled-in fields for the following: Your first name and initial; last name; If a joint return, spouse’s first name and initial; last name; City, town, or post office state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions); Foreign country name; Foreign province/ state/ country; Foreign postal code; Your social security number; Spouse’s social security number; A Make sure the SSN(s) above are correct, (an arrow points to: Your social security number; Spouse’s social security number). Presidential election campaign. Check here if you, or your spouse if filling jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. (each option is preceded by a tick box) You; spouse. If more than four dependents, see instructions and tick here(check if you agree). The third section shows to be filled-in fields for the following: It consists of 2 parts: Standard Deduction and Age/Blindness. The first part has the following. Someone can claim:? (The choices “You as a dependent”, “Your spouse as a dependent” and “Spouse itemizes on a separate return or you were a dual-status alien”is followed by a tick box). The second part has the following: You: (The choices “Were born before January 2, 1955” and “Are blind”is followed by a tick box), Spouse: (The choices “Were born before January 2, 1955” and “Are blind”is followed by a tick box). The fourth section shows to be filled-in fields for the following: Dependents (see instructions) consists of the following headers: (1) First name and last name, (2) Social security number, (3) Relationship to you and (4) Tick if qualifies for(see instructions): Credit tax credit and Credit for other dependents. The fifth section shows the following fields: 1. Wages, salaries, and tips, etc. Attach Form(s) W-2. 2a. Tax –exempt interest 2b. Taxable interest 3a. Qualified dividends 3b. Ordinary dividends 4a. IRA distributions 4b. Taxable amount 4c. Pensions and annuities 4d. Taxable amount 5a. Social security benefits 5b. Taxable amount 6. Capital gain or (loss). Attach Schedule D if required. If not required, check here. 7a. Other income from Schedule 1, line 9. 7b. Add lines 1, 2b, 3b, 4b, 5b, 6 and 7a. This is your total income. 8a. Adjustments to income from Schedule 1, line 22. 8b. Subtract line 8a from 7b. This is your adjusted gross income. 9. Standard deduction or itemized deductions (from Schedule A) 10. Qualified business income deduction. Attach form 8995 or form 8995-A. 11a. Add lines 9 and 10. 11b. Taxable income. Subtract line 11a from line 8b. The sixth section, Standard deduction chart shows the following fields: IF your filing status is … Single (see the instructions for line 1), AND the number of boxes checked is… 0, THEN your standard deduction is … $ 12,200 or if the number of boxes checked is 1, THEN your standard deduction is … $13,850 or if the number of boxes checked is 2, THEN your standard deduction is … $15,500. IF your filing status is … Married filing jointly or Qualifying widow(er), AND the number of boxes checked is… 0, THEN your standard deduction is … $ 24,400 or if number of boxes checked is… 1, THEN your standard deduction is… $ 25,700,or if number of boxes checked is… 2, THEN your standard deduction is… $ 27,000,or if number of boxes checked is… 3, THEN your standard deduction is… $ 28,300 or if number of boxes checked is… 4, THEN your standard deduction is… $ 29,600. IF your filing status is …Head of household, AND the number of boxes checked is… 0, THEN your standard deduction is … $ 18,350, or if number of boxes checked is… 1, THEN your standard deduction is… $ 20,000 or if number of boxes checked is… 2, THEN your standard deduction is… $ 21,650. IF your filing status is … Married filling separately, AND the number of boxes checked in… 0, THEN your standard deduction is … $ 12,200, or if number of boxes checked is… 1, THEN your standard deduction is… $ 13,500, or if number of boxes checked is… 2, THEN your standard deduction is… $ 14,800, or if number of boxes checked is… 3, THEN your standard deduction is… $ 16,100 or if number of boxes checked is… 4, THEN your standard deduction is… $ 17,400Enlarge ImageContinuation of Form 1040-SR (2019). 12 a. Tax(see inst.) Check if any from Form(s): (The choices “8814”, “4972” and “” are followed by a tick box) 12 b. Add Schedule 2, line 3, and line 12a and enter the total. 13 a. Child tax credit or credit for other dependents. 13b. Add Schedule 3, line 7, and line 13a and enter the total. 14. Subtract line 13b from line 12b. If zero or less, enter -0- 15. Other taxes, including self-employment tax, from Schedule 2, line 10. 16. Add lines 14 and a5. This is your total tax. 17. Federal income tax withheld from Forms W-2 and 1099. 18. Other payments and refundable credits: a. Earned income credit (EIC). b. Additional child tax credit. Attach Schedule 8812. c. American opportunity credit from Form 8863, line 8 d. Schedule 3, line 14 . e. Add lines 18a through 18d. These are your total other payments and refundable credits. 19. Add lines 17 and 18e. These are your total payments. The seventh section, Refund shows the following fields: 20. If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid. 21a. Amount of line 20 you want refunded to you. If Form 8888 is attached, click here. 21b. Routing number 21c. Type(The choices “Checking” and “Savings” are followed by a tick box) 21d. Account Number 22. Amount of line 20 you want applied to your 2020 estimated tax . The eigth section, Amount you owe shows the following fields: 23. Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions. 24. Estimated tax penalty (see instructions). The ninth section, Third party designee shows the following: Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions. (The choices “Yes. Complete Below” and “No” are followed by a tick box). It also consists of these fields: Designee’s name, Phone no, Personal identification pin(PIN). The tenth section, Sign here shows the following: Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. It also consists of these fields: Your signature, date, your occupation, spouse’s signature. If a joint return, both must sign, date, spouse’s occupation, if the IRS sent you an identity Protection PIN enter it here, if the IRS sent your spouse an identity Protection PIN enter it here, phone no, email address. The eleventh section, Paid Preparer use only here shows the following: It consists of these fields: Preparer’s name, preparer’s signature, date, PTIN, Firm’s name, Firm’s address, Phone no, Firm’s EIN, check if: (The choices “3rd Party Designee” and “Self-employed” are followed by a tick box)Enlarge ImageForm 1040 shows Itemized Deductions, Schedule A. The form is divided into eight sections. The header from left to right shows the following: Schedule A (Form 1040 or 1040-SR), Department of the Treasury, Internal Revenue Service (99), Itemized Deductions, Information about Schedule A and its separate instructions is at www.irs.gov/schedulea, Attach to Form 1040, OMB No. 1545-0074, 2019, Attachment sequence No. 07, Name(s) shown on Form 1040, and Your social security number. The second section, Medical and Dental Expenses shows to be filled-in fields for the following: (Caution: Do not include expenses reimbursed or paid by others.) 1. Medical and dental expenses (see instructions) 2. Enter amount from Form 1040 or 1040-SR line 8b (Fill-in blank) 3. Multiply line 2 by 10% (0.10). 4. Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- The third section, Taxes You Paid shows to be filled-in fields for the following: 5. State and local (check only one box): (each option is preceded by a tick box) a. State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box. b. State and local real estate taxes (see instructions) c. State and local personal property taxes d. Add lines 5a through 5c e. Enter the smaller of line 5d or $ 10,000 ($ 5,000 if married filling separately). 6. Other taxes, list type and amount 7. Add lines 5e and 6 The fourth section, Interest You Paid shows to be filled-in fields for the following: (Caution: Your mortgage interest deduction may be limited (see instructions)). 8. Home mortgage interest and points. If you didn’t use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box a. Home mortgage interest and points reported to you on form 1098. See instructions if limited. b. Home mortgage interest not reported to you on form 1098. If paid to the person from whom you bought the home, see instructions and show that person’s name, identifying no., and address c. Points not reported to you on form 1098. See instructions for special rules d. Reserved e. Add lines 8a through 8c 9. Investment interest. Attach form 4952 if required. See instructions 10. Add lines 8e and 9 The fifth section, Gifts to Charity shows to be filled-in fields for the following: (Caution: If you made a gift and got a benefit for it, (see instructions)) 11. Gifts by cash or check. If you made any gift of $250 or more, (see instructions) 12. Other than by cash or check. If any gift of $250 or more, see instructions. You must attach Form 8283 if over $500 13. Carryover from prior year 14. Add lines 11 through 13 The sixth section, Casualty and Theft Losses shows to be filled-in field for the following: 15. Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach form 4684 and enter the amount from line 18 of that form. See instructions. The seventh section, Other Itemized Deductions shows to be filled-in field for the following: 16. Other—from list in instructions. List type and amount The eighth section, Total Itemized Deductions shows to be filled-in fields for the following: 17. Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 9. 18. If you elect to itemize deductions even though they are less than your standard deduction, check this box. An arrow from the line points to a tick box. A foot note below the form reads, “For Paperwork Reduction Act Notice, see the instructions for Form 1040 and 1040-SR, Cat. No. 17145C, Schedule A (Form 1040 or 1040-SR) 2019.” A watermark on the form reads, “DRAFT AS OF July 19, 2019 DO NOT FILE.”Enlarge ImageForm 1040 or 1040-SR shows Interest and Ordinary Dividends. The form is divided into four sections. The header from left to right shows the following information: SCHEDULE B (Form 1040 or 1040-SR), Department of the Treasury, Internal revenue service (99); Interest and ordinary dividends, Attach to Form 1040A or 1040, Information about Schedule B and its instructions is at www.irs.gov/scheduleb; and OMB No. 1545-0074, 2019 Attachment sequence No. 08, Name(s) shown on return and your social security number. The second section, part I interest shows the following instructions: (See instructions and the instructions for Form 1040, and 1040-SR, line 2b.) Note: If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the total interest shown on that form. The instructions are followed by to be filled-in fields for the subsequent: 1. List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see instructions on back and list this interest first. Also, show that buyer’s social security number and address 2. Add the amounts on line 1 3. Excludable interest on series EE and 1 U.S. savings bonds issued after 1989. Attach Form 8815 4. Subtract line 3 from line 2. Enter the result here and on Form 1040, or Form 1040-SR, line 2b Note: If line 4 is over $ 1,500, you must complete part III. To be filled-in fields for Amount exists against the part I. The third section, part II ordinary dividends shows the following instructions: (See instructions and the instructions for Form 1040 and 1040-SR, line 3b) Note: If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the ordinary dividends shown on that form. The instructions are followed by to be filled-in fields for the subsequent: 5. List name of payer 6. Add the amounts on line 5. Enter the total here and on Form 1040A or 1040-SR, line 3b Note: If line 6 is over $1,500, you must complete part III. To be filled-in fields for Amount exists against the part II. The fourth section, part III foreign accounts and trusts shows the following instruction: Caution: If required, failure to file FinCEN form 114 may result in substantial penalties. See instructions. You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends: (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust. 7a. At any time during 2019, did you have a financial interest in or signature authority over a financial account (such as a bank account. securities account, or brokerage account) located in a foreign country? See instructions If "Yes," are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements b. If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located 8. During 2019, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If "Yes" you may have to file Form 3520. See instructions To be filled-in fields for Yes and No exists against the part III. A foot note below the form reads, “For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 17146N Schedule B (Form 1040A or 1040-SR) 2019.” A watermark on the form reads, “DRAFT AS OF July 24, 2019 DO NOT FILE.”Enlarge ImageForm 1040 shows Capital Gains and Losses. The form is divided into four sections. The header from left to right shows the following information: SCHEDULE D (Form 1040 or 1040-SR) Department of the Treasury Internal Revenue Service (99), Capital Gains and Losses, Attach to Form 1040, 1040-SR, or 1040-NR, Information about Schedule D and its separate instructions is at www.irs.gov/scheduleD, Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Name(s) shown on return and your social security number. The second section, Part I-Short-Term Capital Gains and Losses—Generally Assets Held One Year or Less, shows a table followed by to be filled-in fields: (See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars.) The column headers of the table are: (d) Proceeds (sales price) Column 2. (e) Cost (or other basis), (g) Adjustments to gain or loss from Form(s) 8949, Part I, line 2, column (g), and (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with column (g). The row headers are as follows: 1a. Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b. 1b. Totals for all transactions reported on Form(s) 8949 with Box A checked. 2. Totals for all transactions reported on Form(s) 8949 with Box B checked 3. Totals for all transactions reported on Form(s) 8949 with Box C checked The table is followed by to be filled-in fields for the subsequent: 4. Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 5. Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6. Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions 7. Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back The third section, Part II-Long-Term Capital Gains and Losses—Generally Assets Held More Than One Year, shows a table followed by to be filled-in fields: (See instructions for how to figure the amounts to enter on the lines below. This form may be easier to complete if you round off cents to whole dollars.) The column headers of the table are as same as the column headers of the table in the part 1. The row headers are as follows: 8a. Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b 8b. Totals for all transactions reported on Form(s) 8949 with Box D checked 9. Totals for all transactions reported on Form(s) 8949 with Box E checked 10. Totals for all transactions reported on Form(s) 8949 with Box F checked 11. Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 12. Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 13. Capital gain distributions. See the instructions 14. Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions 15. Net long-term capital gain or (loss). Combine lines 8a through 14 in column (h). Then go to Part III on the back A foot note below the form reads, “For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H, Schedule C (Form 1040 or 1040-SR) 2019.”Enlarge ImageContinuation of Form 1040: Capital Gains and Losses. The form is divided into four sections. The fourth section, Part III-Summary, shows to be filled-in fields for the following: 16. Combine lines 7 and 15 and enter the result • If line 16 is a gain, enter the amount from line 16 on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14. Then go to line 17 below. • If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. • If line 16 is zero, skip lines 17 through 21 below and enter -0- on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14. Then go to line 22. 17. Are lines 15 and 16 both gains? (each option is preceded by a tick box) Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 18. If you are required to complete to 28% Rate Gain Worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 19. If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 20. Are lines 18 and 19 both zero or blank? (each option is preceded by a tick box) Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040NR, line 42). Do not complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Do not complete lines 21 and 22 below. 21. If line 16 is a loss, enter here and on Form 1040 or 1040-SR, line 6; or Form 1040-NR, line 14, the smaller of: • The loss on line 16 or • ($3,000), or if married filing separately, ($1,500) Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22. Do you have qualified dividends on Form 1040 or 1040-SR, line 3a; or Form 1040-NR, line 10b? (each option is preceded by a tick box) Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. A watermark on the form reads, “DRAFT AS OF August 30, 2019 DO NOT FILE.”Enlarge ImageForm 6252: Installment sale Income. The form is divided into four sections. The header from left to right shows the following information: Form 6252, Department of the Treasury, Internal Revenue Service, Installment sale Income, Attach to your tax return, Use a separate form for each sale or other disposition of property on the installment method, Information about Form 6252 and its instructions is at www.irs.gov/form6252, OMB No. 1545-0228, 2019, Attachment Sequence No. 79, The text below the header shows filled-in and to be filled-in fields for the following, Name(s) shown on return: Howard Scripp, Identifying number. 1. Description of property: Land 2. a. Date acquired (mm/dd/yyyy) b. Date sold (mm/dd/yyyy) 3. Was the property sold to a related party (see instructions) after May 14, 1980? If “No,” skip line 4 (each option is preceded by a tick box)Yes; (tick box checked)No 4. Was the property you sold to a related party a marketable security? If “Yes,” complete Part III. If “No,” complete Part III for the year of sale and the 2 years after the year of sale (each option is preceded by a tick box)Yes; No The second section, Part I-Gross Profit and Contract Price, shows filled-in and to be filled-in fields (lines 11, 12 and 15) for the following: Complete this part for the year of sale only 5. Selling price including mortgages and other debts. Don’t include interest, whether stated or unstated: 50,000 6. Mortgages, debts, and other liabilities the buyer assumed or took the property subject to (see instructions): 0 7. Subtract line 6 from line 5:50,000 8. Cost or other basis of property sold: 20,000 9. Depreciation allowed or allowable: 0 10. Adjusted basis. Subtract line 9 from line 8: 20,000 11. Commissions and other expenses of sale 12. Income recapture from Form 4797, Part III (see instructions) 13. Add lines 10, 11, and 12: 20,000 14. Subtract line 13 from line 5. If zero or less, don’t complete the rest of this form (see instructions): 30,000 15. If the property described on line 1 above was your main home, enter the amount of your excluded gain (see instructions). Otherwise, enter -0- 16. Gross profit. Subtract line 15 from line 14: 30,000 17. Subtract line 13 from line 6. If zero or less, enter -0-:0 18. Contract price. Add line 7 and line 17: 50,000 The third section, Part II- Installment Sale Income, shows filled-in and to be filled-in fields (lines 23 and 25) for the following: Complete this part for the year of sale and any year you receive a payment or have certain debts you must treat as a payment on installment obligations. 19. Gross profit percentage (expressed as a decimal amount). Divide line 16 by line 18. For years after the year of sale, see instructions: .60 20. If this is the year of sale, enter the amount from line 17. Otherwise, enter -0-: 0 21. Payments received during year (see instructions). Don’t include interest, whether stated or unstated: 10,000 22. Add lines 20 and 21: 10,000 23. Payments received in prior years (see instructions). Don’t include interest, whether stated or unstated 24. Installment sale income. Multiply line 22 by line 19: 24,000 25. Enter the part of line 24 that is ordinary income under the recapture rules (see instructions) 26. Subtract line 25 from line 24. Enter here and on Schedule D or Form 4797 (see instructions): 6,000 The fourth section, Part III- Related Party Installment Sale Income, shows to be filled-in fields for the following: Don’t complete if you received the final payment this tax year. 27. Name, address, and taxpayer identifying number of related party 28. Did the related party resell or dispose of the property (“second disposition”) during this tax year? (each option is preceded by a tick box)Yes; No 29. If the answer to question 28 is “Yes,” complete lines 30 through 37 below unless one of the following conditions is met. Check the box that applies. (each option is preceded by a tick box) a. The second disposition was more than 2 years after the first disposition (other than dispositions of marketable securities). If this box is checked, enter the date of disposition (mm/dd/yyyy) An arrow from the line points to a [Blank write-on line]. b. The first disposition was a sale or exchange of stock to the issuing corporation. c. The second disposition was an involuntary conversion and the threat of conversion occurred after the first disposition. d. The second disposition occurred after the death of the original seller or buyer. e. It can be established to the satisfaction of the IRS that tax avoidance wasn’t a principal purpose for either of the dispositions. If this box is checked, attach an explanation (see instructions). 30. Selling price of property sold by related party (see instructions) 31. Enter contract price from line 18 for year of first sale 32. Enter the smaller of line 30 or line 31 33. Total payments received by the end of your 2019 tax year (see instructions) 34. Subtract line 33 from line 32. If zero or less, enter -0- 35. Multiply line 34 by the gross profit percentage on line 19 for year of first sale 36. Enter the part of line 35 that is ordinary income under the recapture rules (see instructions) 37. Subtract line 36 from line 35. Enter here and on Schedule D or Form 4797 (see instructions) A foot note below the form reads, “For Paperwork Reduction Act Notice, see page 4. Cat. No. 13601R, Form 6252 (2019)” A watermark on the form reads, “DRAFT AS OF June 14, 2019 DO NOT FILE.”Enlarge ImageForm 8949 shows Sale and Other Dispositions of Capital Assets. The form is divided into three sections. The Header shows the following information from left to right: Sales and Other Dispositions of Capital Assets, Information about Form 8949 and its separate instructions is at www.irs.gov/form8949, File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Schedule D, Name(s) shown on return, and Social security number or taxpayer identification number: (Before you check box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check.) The second section, Part I, shows information followed by a table. Short-Term Transactions involving capital assets you held 1 year or less are short term. For long-term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren’t required to report these transactions on Form 8949 (see instructions). You must check box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (Each option is preceded by a tick box) (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn’t reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B The table 1 shows the following column headers: (a) Description of property (Example: 100 sh. XYZ Co.) (b) Date acquired (Mo., day, yr.) (c) Date sold or disposed of (Mo., day, yr.) (d) Proceeds (sales price) (see instructions) (e) Cost or other basis. See the Note below and see Column (e) in the separate instructions The following column header is sub-divided into (f) and (g) (Adjustment, if any, to gain or loss. If you enter an amount in column (g), enter a code in column (f). See the separate instructions.) (f) Code(s) from instructions (g) Amount of adjustment (h) Gain or (loss). Subtract column (e) from column (d) and combine the result with column (g) 2. Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) The note below section two reads, “If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment.” A foot note below the form reads, “For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z, Form 8949 (2019)” A watermark on the form reads, “DRAFT AS OF July 25, 2019 DO NOT FILE.”Enlarge ImageContinuation of Form 8949: Sale and Other Dispositions of Capital Assets. The form is divided into three sections. Name(s) shown on return: Name and SSN or taxpayer identification no: (not required if shown on other side.) Social security number or taxpayer identification number: (Before you check box D, E, or F below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check.) The third section, Part II, shows information followed by a table. Long-Term Transactions involving capital assets you held more than 1 year are long term. For short-term transactions, see page 1. Note: You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 8a; you aren’t required to report these transactions on Form 8949 (see instructions). You must check box D, E, or F below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (Each option is preceded by a tick box) (D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (E) Long-term transactions reported on Form(s) 1099-B showing basis was not reported to the IRS (F) Long-term transactions not reported to you on Form 1099-B The column headers of the table are same as the column headers of the table in Part 1. 2. Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 8b (if Box D above is checked), line 9 (if Box E above is checked), or line 10 (if Box F above is checked) Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. A watermark on the form reads, “DRAFT AS OF July 25, 2019 DO NOT FILE.”Enlarge Image