Problem
America Los Rios (age 36) is a single taxpayer, living at 4700 Oak Drive, Sacramento, CA 95841. Her Social Security number is 976-23-5132. America's earnings and income tax withholding as the manager of a local supermarket store for 2016 are:
|
Earnings
|
$69,000
|
|
Federal income tax withheld
|
14,800
|
|
State income tax withheld
|
2,300
|
America's other income includes qualifying dividends on American River Corporation stock of $4,400 and interest on a long-term certificate of deposit at Bank of Sacramento of $5,205.
During the year, America paid the following amounts (all of which can be substantiated):
|
Home mortgage interest
|
$10,600
|
|
Credit card interest
|
550
|
|
Auto loan interest
|
1,700
|
|
Life insurance (universal policy)
|
750
|
|
Property taxes on personal residence
|
1,150
|
|
Co-pays for doctor visits during the year
|
650
|
|
Other medical expenses
|
790
|
|
Income tax preparation fee
|
250
|
|
Charitable contributions (in cash)
|
575
|
In her spare time, America trades stocks and bonds. During the year, she sold several stocks and received a Form 1099-B, which showed the following:
|
Stock
|
Acquired
|
Sold
|
Price
|
Basis
|
|
Red Co.
|
02/01/06
|
10/05/16
|
$5,400
|
$2,500
|
|
Green Co.
|
06/11/16
|
08/03/16
|
4,000
|
5,000
|
|
Blue Co.
|
12/12/15
|
09/22/16
|
6,300
|
5,000
|
|
White Co.
|
05/12/05
|
10/15/16
|
7,000
|
4,000
|
|
Black Co.
|
09/15/09
|
11/01/16
|
5,500
|
6,800
|
Required: Complete America's federal tax return for 2016. Use Form 1040, Schedule A, Schedule B, Schedule D, Form 8949, and the Qualified Dividends and Capital Gain Tax Worksheet to complete this tax return (she is not subject to Alternative Minimum Tax). Make realistic assumptions about any missing data.