Reference no: EM131703440
Question - Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Jane's Social Security number is 123-45-6789. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. Jane had health insurance for all months of 2015. During 2015, Jane had the following income and expense items:
a. $100,000 salary from Legal Services, Inc.
b. $20,000 gross receipts from her typing services business.
c. $700 interest income from Acme National Bank.
d. $1,000 Christmas bonus from Legal Services, Inc.
e. $60,000 life insurance proceeds on the death of her sister.
f. $5,000 check given to her by her wealthy aunt.
g. $100 won in a bingo game.
h. Expenses connected with the typing service:
Office rent $7,000
Supplies 4,400
Utilities and telephone 4,680
Wages to part-time typists 5,000
Payroll taxes 500
Equipment rentals 3,000
i. $9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).
j. $15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2015. Jane had paid $14,000 for the silverware on July 1, 2006. She was reimbursed $1,500 by her insurance company.
k. Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2012. Joan declared bankruptcy on August 14, 2015, and was unable to repay the loan. Assume that the loan is a bona fide debt.
l. Legal Services, Inc., withheld Federal income tax of $16,000 and the appropriate amount of FICA tax from her wages.
m. Alimony of $10,000 received from her former husband, Ted Smith.
n. Interest income of $800 on City of Boca Raton bonds.
o. Jane made estimated Federal tax payments of $1,000.
p. Sales taxes from the sales tax table of $946.
q. Property taxes on her residence of $1,100.
r. Charitable contributions of $2,500.
s. In November 2015, Jane was involved in an automobile accident. At the time of the accident, Jane's automobile had an FMV of $45,000. After the accident, the automobile's FMV was $38,000. Jane's basis in the car was $52,000. Jane's car was covered by insurance, but because the policy had a $5,000 deduction clause, Jane decided not to file a claim for the damage.
Required:
Compute Jane Smith's 2015 Federal income tax payable (or refund due). Use Form 1040, Schedule A, Schedule C, Schedule D and Form 4684. (Note: There is a separate Form 4684 for each casualty or theft.)
- Make realistic assumptions about any missing data.
- If an amount box does not require an entry or the answer is zero, enter "0".
- Enter all amounts as positive numbers. However, unless instructed otherwise, use the minus sign to indicate a loss.
- It may be necessary to complete the tax schedules before completing Form 1040.
- When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
Attachment:- Assignment.rar