Reference no: EM13215381

Prepare the complete 2013 federal tax return for the Deckers, including all schedules and attachments.

Paul and Donna Decker are married taxpayers, ages 44 and 42, who file a joint return for 2013. The Deckers live at 1121 College Avenue, Moab, Utah 84632. Paul is an assistant manager at Moab Motor Inn, and Donna is a teacher at Carmel Elementary School. They present you with W-2 forms that reflect the following information:

Paul Donna
Salary $68,000 $46,000
Federal tax withheld 7,770 5,630
State income tax withheld 1,301 812
FICA(social security and
Medicare)withheld 5,202 3,519
Social security numbers 111-11-1111 123-45-6789

Donna is the custodial parent of two children from a previous marriage who reside with the Deckers through the school year. The cildren Larry and Jane parker, reside with their father, Bob, during the summer. Relevant information for the children as follows:

Larry Jane
Age 17 18
Social security numbers 123-45-6788 123-45-6787
Months spent with Deckers 9 9 Under the divorce decree, Bob pays child support of $150 per month per child during the nine months the children live with the Deckers. Bob says he spends $200 per month per child during the three summer months they reside with him. Donna and Paul can document that they provide $2,000 support per child per year. The divorce decree is silent as to which parent can claim the exemptions for the children, and no form 8832 has been signed by either parent of the children.

In August, Paul and Donna added a suite to their home to provide more comfortable accommodations for Hannah Snyder (123-45-6786) Donna's mother who had moved in with them in February 2012 after the death of Donna's father. Not wanting to borrow money for this addition, Paul sold 300 shares of Acme corporation stock for $50 per share on May 3, 2013 and used the proceeds of $15,000 minus sales comission to cover construction costs. He paid his broker sales commissions on the sale of all 300 shares in the amount of $103.00.

The Deckers had purchased the Acme stock of 400 shares on April 29,2008 for $25 per share. Paying brokerage commission of $72.00 .They received cash dividends of $750 on the jointly owned stock a month before the sale.

Hannah, who is 66 years old, received $7500 in social security benefits during the year, of which she gave the Decker's $2,000 to use toward household expenses and deposited the remainder in her personal savings account. The Decker's determine that they have spent $2,500 of their own money for food, clothing, medical expenses, and other items for Hannah. They do not know what the rental value of Hannah's suite would be, but they estimate it would be at least $300 per month.

Interest paid during the year included the following:

HOME MORTAGE interest ([aid to Carmel federal savings & loan) $7,890
Interest on an automobile loan (paid to Carmel National Bank) 1,660
Interest on Citibank Visa card 620

In July, Paul hit a submerged rock while boating. Fortunately, he was thrown from the boat, landed in deep water, and was uninjured. However, the boat, which was uninsured, was destroyed. Paul had paid $25,000 for the boat in June 2012, and its value was appraised at $18,000 immediately before the accident.

The Deckers paid doctor and hospital billsof $8,700 and were reimbursed $2,000 by their insurance company. They spent $640 for prescription drugs and medicines and $5,904 for premiums on their health insurance policy. They have filed additional claims of $1,200 with their insurance company and have been told they will receive payment for a paortion of thse claims ($850) sometime next year.

Additional information of potential tax consequence follows:

Real estate taxes paid $3,850
Sales taxes paid (per table) 1,379
Contributions to church( cash) 1,950
Appraised value of books donated to public library (original cost 1,850) ... 740
Paul's unreimbursed employee expenses to attend hotel
Management convention:
Airfare....................................................................................................1340
Hotel.......................................................................................................440
Meals.......................................................................................................190
Registration fee......................................................................................340
Refund of state income tax for 2012
(the Deckers itemized on their 2012 Federal tax return)...................1,520

Pail and Donna flew together to the hotel management convention in Las Vegas, They arrived on Wednesday evening. Paul attended the convention all day (at least 8 hours) on Thursday and Friday. They went to a couple of shows and did some gambling on Thursday and Friday evening. Although the convention ended on Friday, they decided to stay all day Saturday and have some fun. They flew home early Sunday morning. While in Las Vegas, Donna had casino winnings of $4,500 and casino losses of $2,100 while Paul had $300 in casino losses no winnings.
On September 27, 2013, Paul and Donna received a 10% stock dividend on 600 shares of Utah Mining Corporation stock they owned. They had bought the stock on March 5, 2005, for $20 share. On December 16, 2013, they sold the 60 dividend shares for $55 a share. Neither the purchase not the sale involved a brokerage commission or other expenses.
On October 10, 2013, Donna sold the Nissan automobile she had used in commuting to and from work and driving her family around town for $17,000. She had paid $31,000 for the automobile in 2006.
On July 14, 2004, Paul and Donna received a gift of $1,000 shares of Microsoft stock from Donna's father, Thomas. Thomas basis in the stock was $35 a share (fair market value at the date of the gift was $25). No gift tax was paid on the transfer. Paul and Donna sold all 1,000 shares of Microsoft stock on October 8, 2013, for $24 a share.
Donna received rental income of $18,000 on a beach house she inherited three years ago from her uncle Chuck. The property was rented for all 12 months of 2013. Uncle Chuck's adjusted basis in he beach house was $150,000 and its fair market value on the date of his death was $240,000. Expenses associated with the house, and paid by Paul and Donna, were $3,700 for utilities; $2,200 for property taxes; $800 for insurance, and $1,300 for maintenance and repairs. There are no mortgages on the property.