- Use the following information to complete Phillip and Claire Dunphy's 2015 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem.
- Any required forms, schedules, and instructions can be found at the IRS Web site (www.irs.gov) or moodle. The instructions on moodle can be helpful in completing the forms.
- The forms will include forms 1040, Schedule A, B, C, D, SE, 4562 and 8949. You need to staple and hand in the completed forms (all the information should be typed into the forms) in the above order with a printed cover sheet (10% of the grade will be based on the document organization and clearance).
- This project is time consuming. Please do not wait until the last minutes. Your solutions must be the result of your own work, not a copy of another student's solutions. Please turn in your finished project with a cover sheet before 10:30am, May 11th.
Facts:
1. Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.
- The Dunphys provide you with the following additional information:
- The Dunphys do not want to contribute to the presidential election campaign.
- The Dunphys live at 1234 Canal Blvd, Thibodaux, LA 70301
- Phillip's birthday is 11/5/1976 and his Social Security number is 321-44-5766.
- Claire's birthday is 5/12/1979 and her Social Security number is 567-77-1258.
- Haley's birthday is 11/6/2005 and her Social Security number is 621-18-7592.
- Alex's birthday is 2/1/2007 and her Social Security number is 621-92-8751.
- Luke's birthday is 12/12/2009 and his Social Security number is 621-99-9926.
- The Dunphys do not have any foreign bank accounts or trusts.
- The Dunphys have the full year health insurance coverage.
2. Claire received a Form W-2 from her employer reporting the following information for 2015:
Wages, tips, other compensation: $50,000
Federal income tax withheld 6,175
Social Security tax 3,600
Medicare tax 825
State income taxes withheld 1,800
3. Phillip and Claire received $400 of interest from Chase Savings Bank on a joint account. They also received a qualified dividend of $400 on jointly owned stock in Xila Corporation. In addition, they received $200 of interest from New Orleans Municipal bonds.
4. Phillip's real estate business is named "Phillip Dunphy Realty." His business is located at 5678 Main Street, Houma, LA 70112, and his employer identification number is 93-3488888. Phillip's gross receipts during the year were $950,000. Phillip uses the cash method of accounting for his business. Phillip's business expenses are as follows:
5. Phillip purchased $700,000 of office furniture and equipment held for business use on March
4, 2015. He would like to use the Sec. 179 immediate expensing, but he has elected to not claim any bonus depreciation.
6. The assets Phillip acquired and placed into service before 2015 are as follows: Date Acquired Asset Original Cost
3/1/08 Office building $xx,xxx
3/1/08 Land xx,xxx
5/1/08 Furniture xxx,xxx
4/12/11 Office equipment xx,xxx
5/13/13 Computers xx,xxx (You need to get all these numbers
from the instructor individually)
Phillip did not elect a Section 179 deduction for any of the assets above, nor did he take advantage of the depreciation bonus.
7. The Dunphys sold 55 shares of Fizbo Corporation common stock on September 3, 2015, for $80 a share. The Dunphys purchased the stock on November 8, 2013, for $65 a share. They also sold a painting for $14,000 on March 1, 2015. Claire purchased the painting for $20,000 on September 1, 2005, as an investment.
8. Phillip and Claire's personal expenses for the year are as follows:
Credit card debt $ 800
Qualified medical bills 4,400
Real property taxes 3,300
Home mortgage interest 9,500
Homeowners insurance on the home 1,200
Cash contributions to NSU accounting program 4,500
Union dues 100
Tax return preparation fee (no Schedule C) 360
Tax return preparation fee (Schedule C) 500
9. Claire's father passed away in 2014. In 2015, Phillip and Claire received $50,000 in life insurance proceeds. Phillip and Claire support Claire's mother, Joy Freud (333-66-9999), in an assisted living facility in Houma. They paid 75% of her support in 2015. Joy's only income is $12,000 nontaxable social security benefits. Joy had the Medicare for the full tax year.
10. Phillip made timely estimated federal income tax payments of $14,000 each quarter during 2015. He also made estimated state income tax payments of $1,000 each quarter. Phillip made all fourth-quarter payments on December 31, 2015. They would like to receive a refund for any overpayments.
Hint: suggested order to finish the project
a) Form 4562
b) Schedule C
c) Schedule SE
d) Form 8949
e) Schedule D
f) Schedule B
g) Form 1040 (to line 38)
h) Schedule A
i) Form 1040 (after line 38)