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Ken (age 31) and Amy (age 28) Booth have brought you the following information regarding thei incom

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Ken (age 31) and Amy (age 28) Booth have brought you the following information regarding thei incom;Ken (age 31) and Amy (age 28) Booth have brought you the following information regarding thei income, expenses, and withholding for the year. They are unsure which of these items must be used to calculate taxable income. Income: Ken's salary- $27,200 Amy's wages- 18,200 Insurance reimbursement for repairs from and auto accident- 500 Gift from uncle George- 2000 Interest income from Lodge state bank- 640 Federal income taxes withheld: from ken's salary- 1200 from amy's wage- 650 Amy owns and operates a computer bookstore named "The Disk Drive" The store is located at 2000 park ave, Bellview, ME 04104. During 2012, Amy had the following income and expenses: sales of books- $320,400 Expenses: Store rental- 15000 office expense- 6000 advertising- 14000 city business license 1000 payroll 89000 payroll taxes- 9100 utilities- 8000 other- 3000 Inventory: Jan. 1- 250,000 Dec. 31- 235,000 purchases during the year- 165,000 last years amy's first year of operating the booksotre. amy and ken elected to carry forward a $5000 net operating loss from the first year of business into 2012. This year amy loaned a friend $20,000 so that he could make an investment. instead of making the investment the friend lost all of the money in gambling and left for parts unknown. amy has no hope of ever collecting on this bad debt. Ken won $25,000 at a casino birthday party for a friend. this amount should be reported on the other income line. The booths support kens parents Rod (social security # 124809050) and Mary (social security # 489376676) Booth who live in their own home. ken and amy live at 2345 park ave. bellview ME 04104 and their social security numbers are ken 343753456 and amy 123457890 Complete the federal tax return for 2012. use form 1040, schedule c, schedule d, and form 8949.

 

Paper#29199 | Written in 18-Jul-2015

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