I have H & R Block Assignment.
Tax Return Problem – Decision Making – Communications 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 2016. During 2016, Jane had the following income and expense items:
- $100,000 salary from Legal Services, Inc.
- $20,000 gross receipts from her typing services business.
- $700 interest income from Third National Bank.
- $1,000 Christmas bonus from Legal Services, Inc.
- $60,000 life insurance proceeds on the death of her sister.
- $5,000 check given to her by her wealthy aunt.
- $100 won in a bingo game.
- 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
- $9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).
- $15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2016. Jane had paid $14,000 for the silverware on July 1, 2007. She was reimbursed $1,500 by her insurance company.
- Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2013. Joan declared bankruptcy on August 14, 2016, and was unable to repay the loan. Assume that the loan is a bona fide debt.
- Legal Services, Inc., withheld Federal income tax of $16,000 and the appropriate amount of FICA tax from her wages.
- Alimony of $10,000 received from her former husband, Ted Smith.
- Interest income of $800 on City of Boca Raton bonds.
- Jane made estimated Federal tax payments of $1,000.
- Sales taxes from the sales tax table of $946.
- Property taxes on her residence of $1,100.
- Charitable contribution of $2,500 to her alma mater, Citrus State College.
- On November 1, 2016, 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 acquired the car on May 2, 2015 at a cost of $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.