FEDERAL TAX PROJECT
Individual Income Tax Return
ASSIGNMENT INSTRUCTIONS:
1. Prepare the 2015 (Married filing Joint) Federal Individual Income tax return for George & Louise Jefferson based on the information supplied in the attached case. [DO NOT PREPARE TAX RETURNS FOR ANY DEPENDENTS]
2. You may use tax software OR you may manually prepare the return using the correct IRS forms for 2015. Warning: If you use software, you are still responsible for the accuracy of the return!! SEE # 4 below............ Manual forms and instructions are available for download at www.irs.gov. I have posted the following tax forms to Blackboard, along with IRS line by line instructions:
A. Form 1040 (page 1 & 2)
B. Schedule A - Itemized Deductions
C. Schedule B - Interest and Ordinary Dividends
D. Schedule C - Profit and Loss From Business
E. Schedule D - Capital Gains and Losses - No need to prepare form 8949, instead:
- Include a separate spreadsheet for short term gains and losses and report the totals on line 3 of schedule D.
- Include a separate spreadsheet for long term gains and losses and report the totals on line 10 of schedule D.
F. Schedule E- Rent & Royalty Income
G. Schedule SE - Self Employment Tax
H. Form 8959 - Additional Medicare Tax
I. Form 8960 - Net Investment Income Tax
From the information provided below, prepare a 2015 Federal Income tax return for George & Louise Jefferson. The client is married and file a joint tax return. READ THE DETAILED INSTRUCTIONS ON THE PREVIOUS PAGES!
Personal Information:
Taxpayer: George Jefferson Spouse: Louise Jefferson
Age 65 Age: 56
Occupation: Self employed Occupation: Part time worker
Address: 1 Anywhere Road, Anytown, NJ
The Jefferson's have no children of their own, but they provide over 50% support for the following individuals:
Edith Jefferson - Mother of George, age 87. Lives with George & Louise. Edith has $ 4,750 in 2015 gross income.
John Andrews - Louise's Uncle, age 79. John does not live with George and Louise. John has 2015 gross income of $ 3,000.
Charles Jefferson - Nephew of Louise, High School student, age 18. Living with the Jefferson's ever sense Charles's mother died in 2010. Charles has 2015 gross income of $ 6,000.
2015 PROPERTY TRANSACTIONS:
1. On 1/18/15 George sold 100 shares of XYZ stock for $ 19,250. He purchased the 100 shares on 8/16/14 for $ 34,400.
2. On 9/13/15, George sold 100 shares of Pfizer for $ 3,450. George purchased these shares on 4/13/14 for $ 3,000.
3. Louise sold 100 shares of J&J Corp. 3/10/15 for $ 12,200. Louise purchased 200 shares of J&J on 7/1/08 for $ 40 per share. After the 3/10/15 sale, Louise still owns 100 shares of ABC.
4. George sold a personal use automobile (BMW) for $ 9,800 on 5/12/15. George received this car as a gift on 3/12/15 from his friend. The car had a fair market value of $ 9,600 as of the day of the gift. George's friend purchased the car for $ 7,200 on 2/3/13.
5. George sold a ring on 5/9/15 for $ 800. George purchased this ring in 2008 for $ 2,000.
Other 2015 Income items:
1. George inherited $ 250,000 in July of 2015 from the estate of his father.
2. Louise received $ 200 in fees for attending Jury duty in 2015.
3. In 2015, George found a vintage painting in the attic of his house. It did not belong to the previous owners, and George was granted legal ownership of the painting. The fair market value of the painting is $ 20,000.
George and Louise provided you with the following information of possible deductions, credits, etc:
- George & Louise live in a high-rise apartment. Their 2015 rent was $ 48,000.
- George and Louise own 2 BMW automobiles. 2015 Interest paid on the auto loans totaled $ 9,800.
- Cash gifts to qualified charities for 2015 totaled $ 4,000. All receipts are provided.
- Louise donated used furniture to the Salvation Army on 8/22/15. The furniture cost $ 8,000 in 1998 and was worth $ 475 at the time of the gift.
- George and Louise funded deductible traditional IRA's to the maximum amount in 2015. Neither was covered by a qualified retirement plan through an employer.
- George paid 2015 federal estimated tax payments totaling $ 120,000 ($ 30,000 times 4 payments).
- George paid the following NJ estimated tax payments for 2015:
Date paid Amount
4/15/15 $ 800
6/15/15 800
9/15/15 800
1/15/16 800
- George also paid $ 900 in NJ income tax on 4/15/15 as a balance due on their 2014 State Income tax return.
Attachment:- Project Assignment.rar