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Acct 3210 Fall 2013 2nd Tax Return Project




Question;Acct 3210 Fall 2013;?002;2nd Tax Return Project;Part of the educational objective of this project;is to enhance your understanding of how the different tax forms are related to;each other, and how amounts from one from one part of the form to a different;part of the same form or flow to another form. Therefore, all forms are to be;completed manually. You may not use a computer-based tax compliance software;program in completing this assignment. Each student is required to complete an;original of the tax return forms. Also, you cannot use fillable forms. You;should complete your forms in blue ink or in pencils, something that is clearly;distinguishable from ink or photocopy.;You should turn in;all of your workpapers supporting your conclusions. Such workpapers would;normally include forms that are not required for the return but that you used;in calculating an amount for the return, or copies of research that was done to;determine or support a technical conclusion.;If you make an assumption about a technical;matter, a matter that affects any item on the return or omitted from the;return, you should submit the research you did to support that assumption.;For students working in groups, it is not;important that all students agree with the conclusions of other members. Each;student submits his or her own results.;Students may;consult only with other members of the same group. You may not seek the advice;of individuals outside of your group, meaning that students may also not seek;the advice of anyone outside the class. You can do online research, but you may;not post questions or seek online solutions to questions specific to the facts;of this assignment.;If you elected to work alone and you decide that;you would instead prefer to work in a group, please advise me in advance of all;members of the group. I will respond with a written acknowledgement and;approval. Until you have that acknowledgement and approval, you are not;authorized to work in the group.;All assignments are due at the start of class on;the due date. Because we will be reviewing the solution in class, late;submissions will not be accepted without advance written approval from the;instructor. Such approval will not be granted easily and will be accompanied;by a penalty of 20 points for each calendar day or fraction thereof.;Acct 3210 Fall 2013;?002;2nd Tax Return Project;I have read the;requirements on the preceding page, and I affirm that the work I am submitting;is entirely my own work or my work in collaboration only with other members of;my group. Also, even though the attached represents my work or the work of my;group, I affirm that I have not helped any other class member with this;assignment. I understand that any violation of these requirements will be;considered as a violation of the College?s Honesty Policy, and I may receive a;score of zero for this assignment.;Print Name Signature;Acct 3210 Fall 2013 ?002;2nd Tax Return Project;Please complete the required federal individual income tax return;forms for the following taxpayer.;Unless instructed otherwise, the information;provided is for the taxpayer?s 2012 tax year. Please complete his 2012;tax return. Ignore the requirement to attach the form(s) W-2.;Bob Grant is unmarried and lives in Lexington;Kentucky. Bob?s wife died in 2009, leaving him with three children Alyssa, now;age 19, Jared, now age 15 and Katherine, now age 12.;?;Bob?s;Social Security number is 987-45-1234;?;Alyssa?s;Social Security number is 412-32-4537;?;Jared?s;Social Security number is 412-32-5690;?;Katherine?s;Social Security number is 412-32-6940;?;The Grants?;mailing address is 95 Hickory Road, Lexington, Kentucky 40502.;?;Jared and;Katherine are tax dependents for federal tax purposes;Alyssa is a full-time student at the University;of Lexington. Bob provided all of her support. During 2012, Bob paid $11,000 in;tuition expenses, $7,300 in Room and Board expenses, and $1,875 for books.;Bob Grant received the following wages during the year;Gross Wages;Federal Income Tax;State Income Tax;Employer;(salary and bonus);Withholding;Withholding;National Storage;$166,200;$33,979;$8,750;All applicable and appropriate payroll taxes were withheld by Bob?s;employer.;Bob has an online business that he conducts;mostly on week-ends. The following receipts and expenditures are from that;online business;Gross Receipts;$25,000;Cost of Merchandise Sold;10,000;Operating Expenses;?;Advertising;$1,450;?;Insurance-Professional;$750;? Travel;lodging while out of town at shows;$2,200;? Meals;while out of town;$475;?;Supplies;$800;? Legal;and professional fees;$550;Ignore considerations of depreciation/cost recovery, home office;expenses or inventories;Page 1;Acct 3210 Fall 2013 ?002;2nd Tax Return Project;In addition to his wages and his online business, Bob also received;the following income during the year;Dividend income, including $3,500 of Qualified;Dividends;$3,975;Interest Income from First Kentucky Bank;$130;Interest Income from City of Lexington, KY Bond;(Private activity bonds);$900;Interest Income from U.S. Treasury Bond;$675;Interest Income from Nevada State School Board;Bond;$150;During the;year, Bob settled a lawsuit related to an auto accident in an earlier year. He;received the following payments;Unreimbursed;Medical Expenses;Bob was not able;to deduct these because of the % of AGI threshold.;$2,500;Emotional;Distress;$12,000;Punitive Damages;$10,000;Total receipts;$24,500;Bob purchased an annuity 8 years ago and began;receiving payments this year. The cost of the annuity contract was $88,000. It;will pay him $15,000 per year for ten years (beginning with this year). The;$15,000 payment was reported to Bob on a form 1099-R (box 7 contained an entry;of ?7? on the form).;Bob Grant paid or incurred the following expenses (payment was during;2012 unless noted otherwise);Dentist/Orthodontist (unreimbursed by;insurance);$8,500;Doctors (unreimbursed by insurance);$ 625;Prescriptions (unreimbursed by insurance);$ 380;KY state tax payment made on 4/15/12 for 2011;liability;$1,200;KY state tax payment made on 4/15/13 for 2012;liability;$1,600;Real property taxes on residence;$5,800;Vehicle property tax based upon age of vehicle;$250;Mortgage interest on principal residence;$8,560;Home equity loan interest. The principal amount;of the loan is $125,000.;None of the proceeds were applied to acquire or;substantially improve the;home or for business or investment. The loan;amount is less than the;excess of the market value of the home over the;acquisition indebtedness.;$7,500;Interest paid on funds borrowed to purchase the;City of Lexington, KY;municipal bonds;$400;Interest paid on funds borrowed to purchase;U.S. Treasury bonds;$240;Cash contribution to the Red Cross;$1,000;Contributions to Senator Rick Hartley?s;Re-election Campaign;$1,200;Cash Contributions to First Baptist Church of;Kentucky;$6,000;Page 2;Acct 3210 Fall 2013 ?002;2nd Tax Return Project;In addition, Bob drove 6,750 miles commuting to;work at National Storage. Bob has represented to you that he maintained careful;logs to support the mileage.;In April, Bob drove a total of 465 miles to receive medical treatment;for Jared at a hospital.;The Grants? personal residence was burglarized on;October 1, 2012. The theft occurred during the day while Bob was at work and;the children were at school. None of the stolen property was related to Bob?s;online business. The following personal property was stolen;Fair Value;Tax Basis of;Insurance;Purchase;on Date of;Reimbursement;Item;Item;Date;Theft;Received;Laptop computer and Printer;09/01/2012;3,000;3,000;500;Rifle;03/01/2010;2,000;2,500;500;TV/Projector;03/01/2010;5,000;13,000;1,000;2005 Honda Pilot;07/01/2011;4,000;6,500;500;Bob Grant;has a $4,500 short term capital loss carryover coming into the 2012 tax year.;During 2012, he had the following Securities Transactions;Description;Date;Acquired;Date Sold;Adjusted Basis;Net Proceeds;100 shares Stock ABC Corp;7/31/2007;6/28/2012;$10,200;$24,700;150 shares Stock GHI Corp;7/8/2011;6/28/2012;12,000;11,100;$5,000 Bonds issued by ZYX Corp., *;6/22/2010;3/15/2012*;4,350;5,000;200 Shares Stock MNO Corp;3/16/2012;7/31/2012;15,000;12,500;300 Shares Stock MNO Corp;8/24/2012;N/A;13,000;N/A;* The ZYX Corp bonds were purchased in the;secondary market. Par is $1,000, they were purchased for $870 per thousand.;They were due and were redeemed on March 15, 2012;Bob wants to contribute to the Presidential;Election Campaign. He would like to receive a refund (if any) of any tax he may;have overpaid for the year. His preferred method of receiving the refund is by;check.;Bob did not own, control or manage any foreign;bank accounts nor was he a grantor or beneficiary of a foreign trust during the;tax year.;Page 3


Paper#38146 | Written in 18-Jul-2015

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