Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

Homework questions over Federal income tax returns

Customer Question
• Use the following information...

• Use the following information to complete Paul and Judy Vance’s 2010 federal
income tax return. If information is missing, use reasonable assumptions to fill
in the gaps.
• You may need the following forms and schedules to complete the project:
Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E,
Schedule SE, Form 2106-EZ, Form 4562 (for the dental practice), Form 4562
(for the rental property), Form 4797, and Form 8863. The forms, schedules,
and instructions can be found at the IRS Web site (www.irs.gov). The
instructions can be helpful in completing the forms.
Facts:
1. Paul J. and Judy L. Vance are married and file a joint return. Paul is self-
employed as a dentist, and Judy is a college professor. Paul and Judy have
three children. The oldest is Vince who lives at home. Vince is a law student
at the University of Cincinnati and worked part-time during the year, earning
$1,500, which he spent for his own support. Paul and Judy provided $6,000
toward Vince’s support (including $4,000 for Vince’s fall tuition). They also
provided over half the support of their daughter, Joan, who is a full-time
student at Edgecliff College in Cincinnati. Joan worked part-time as an independent contractor during the year, earning $3,200. Joan lived at home until
she was married in December 2010. She filed a joint return with her husband,
Patrick, who earned $20,000 during the year. Jennifer is the youngest and
lived in the Vance’s’ home for the entire year. The Vance’s provide you with the
following additional information:
• Paul and Judy would like to take advantage on their return of any
educational expenses paid for their children.
• The Vance’s do not want to contribute to the presidential election
campaign.
• The Vance’s live at***** Cincinnati, OH 45211.

• Paul’s birthday is ***** and his Social Security number is *****
• Judy’s birthday is ***** and her Social Security number is *****
• Vince’s birthday is ***** and his Social Security number is *****
• Joan’s birthday is ***** and her Social Security number is *****
• Jennifer’s birthday is ***** and her Social Security number is
XXX-XX-XXXX.
• The Vance’s do not have any foreign bank accounts or trusts.
2. Judy is a lecturer at Xavier University in Cincinnati, where she earned $30,000.
The university withheld federal income tax of $3,375, state income tax of

Appendix C C-1
$900, Cincinnati city income tax of $375, $1,860 of Social Security tax and
$435 of Medicare tax. She also worked part of the year for Delta Airlines.
Delta paid her $10,000 in salary, and withheld federal income tax of $1,125,
state income tax of $300, Cincinnati city income tax of $125, Social Security
tax of $620 and Medicare tax of $145.
3. The Vance’s received $800 of interest from State Savings Bank on a joint
account. They received interest of $1,000 on City of Cincinnati bonds they
bought in January with the proceeds of a loan from Third National Bank of
Cincinnati. They paid interest of $1,100 on the loan. Paul received a dividend
of $540 on General Bicycle Corporation stock he owns. Judy received a dividend of $390 on Acme Clothing Corporation stock she owns. Paul and Judy
received a dividend of $865 on jointly owned stock in Maple Company. All of
the dividends received in 2010 are qualified dividends.
4. Paul practices under the name “Paul J. Vance, DDS.” His business is located at 
***** Cincinnati, OH 45211, and his employer identification number is ***** Paul’s gross receipts during the year were $111,000. Paul uses
the cash method of accounting for his business. Paul’s business expenses are as
follows:
Advertising $ 1,200
Professional dues 490
Professional journals 360
Contributions to employee benefit plans 2,000
Malpractice insurance 3,200
Fine for overbilling State of Ohio for work 5,000
performed on welfare patient
Insurance on office contents 720
Interest on money borrowed to refurbish office 600
Accounting services 2,100
Miscellaneous office expense 388
Office rent 12,000
Dental supplies 7,672
Utilities and telephone 3,360
Wages 30,000
Payroll taxes 2,400
In June, Paul decided to refurbish his office. This project was completed and the
assets placed in service on July 1. Paul’s expenditures included $8,000 for new
office furniture, $6,000 for new dental equipment (seven-year recovery period),
and $2,000 for a new computer. Paul elected to compute his cost recovery
allowance using MACRS. He did not elect to use §179 immediate expensing and he chose to not claim any bonus depreciation.
5. Judy’s mother, Sarah, died on July 2, 2005, leaving Judy her entire estate.
Included in the estate was Sarah’s residence (325 Oak Street, Cincinnati, OH
45211). Sarah’s basis in the residence was $30,000. The fair market value of the
residence on July 2, 2005,

Submitted: 5 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 4 minutes by:
11/17/2012
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 5 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,858
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

JACUSTOMER-nia9g5qf- :

There was $155,000. The property was distributed to Judy on January 1, 2006. The Vance’s have held the property as rental property and have managed it themselves. From January 1, 2006, until June 30, 2010, they rented the house to the same tenant. The tenant was transferred to a branch office in California and moved out at the end of June. Since they did not want to bother finding a new tenant, Paul and Judy sold the house on June 30, 2010.

They received $140,000 for the house and land ($15,000 for the land and $125,000 for the house), less a 6 percent commission charged by the broker. They had

C-2 Appendix C

depreciated the house using the MACRS rules and conventions applicable to residential real estate. To compute depreciation on the house, the Vance’s had allocated $15,000 of the property’s basis to the land on which the house is located. The Vance’s collected rent of $1,000 a month during the six months the house was occupied during the year. They incurred the following related expenses during this period:

Property insurance $500

Property taxes 800

Maintenance 465

Depreciation (to be computed)?

6. The Vance’s sold 200 shares of Capp Corporation stock on September 3, 2010, for $42 a share (minus a $50 commission). The Vance’s received the stock from Paul’s father on June 25, 1979, as a wedding present. Paul’s father originally purchased the stock for $10 per share in 1966. The stock was valued at $14.50 per share on the date of the gift. No gift tax was paid on the gift.

7. Judy is required by Xavier University to visit several high schools in the

Cincinnati area to evaluate Xavier University students who are doing their practice teaching. However, she is not reimbursed for the expenses she incurs in doing this. During the spring semester (January through April 2010), she drove her personal automobile 6,800 miles in fulfilling this obligation. Judy drove an additional 6,700 personal miles during 2010. She has been using the car since June 30, 2009. Judy uses the standard mileage method to calculate her car expenses.

8. Paul and Judy have given you a file containing the following receipts for expenditures during the year:

Prescription medicine and drugs (net of insurance reimbursement) $376

Doctor and hospital bills (net of insurance reimbursement) 2,468

Penalty for underpayment of last year’s state income tax 15

Real estate taxes on personal residence 4,762

Interest on home mortgage (paid to Home State Savings & Loan) 8,250

Interest on credit cards (consumer purchases) 595

Cash contribution to St. Matthew’s church 3,080

Payroll deductions for Judy’s contributions to the United Way 150

Professional dues (Judy) 325

Professional subscriptions (Judy) 245

Fee for preparation of 2009 tax return paid April 14, 2010 500

9. The Vance’s filed their 2009 federal, state, and local returns on April 14, 2010. They paid the following additional 2009 taxes with their returns:

federal income taxes of $630, state income taxes of $250, and city income taxes of $75.

10. The Vance’s made timely estimated federal income tax payments of $1,500 each quarter during 2010. They also made estimated state income tax payments of $300 each quarter and estimated city income tax payments of $160 each quarter.

The Vance’s made all fourth-quarter payments on December 31, 2010. They would like to receive a refund for any overpayments.

Ask Your Own Tax Question
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,858
12,858 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
How much is UK Corporation Tax on foreign dividends received
Hi Tony,How much is UK Corporation Tax on foreign dividends received from Honk Kong subsidiary?The recipient of such dividends is UK based Limited company. Are these foreign dividends exempt for a "sm… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
My question is about depreciation for rental property. My
Hello. My question is about depreciation for rental property. My rental property had no income during one year. In this case, since there was no income, I do not need to claim depreciation for that sa… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
I have a schedule e form that I filed for extension (2016).
I have a schedule e form that I filed for extension (2016) . I attempted to send in time online but was thwarted by my own incompetence to follow directions basically. I saw that if I used a free form… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am a personal injury attorney doing a schedule c as we
I am a personal injury attorney doing a schedule c as we speak. . … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Small schedule c business donates fully depreciated
small schedule c business donates fully depreciated furniture to charity. They've been told that the FMV is $1,000. What is the deduction for contributed property? … read more
Lane
Lane
JD, CFP, MBA, CRPS
12,858 satisfied customers
Where can I get the Federal income tax regulation? Where can
Where can I get the Federal income tax regulation? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If my Schedule E loss is disallowed for a rental property
If my Schedule E loss is disallowed for a rental property (due to income level), can I take the mortgage interest and real estate taxes paid on Schedule A instead of on Schedule E?The entire expense a… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
I asked for an Federal Income Tax extension to 10/16/17 and
I asked for an Federal Income Tax extension to 10/16/17 and I paid taxes due. This was for 2016. Am I able to extend it further?… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I'm going my federal income taxes. I have a small business.
I'm going my federal income taxes. I have a small business. I have 1099s from some of the companies that paid me, and the rest were individuals, various amounts. I listed all the 1099s separately in T… read more
abci168
abci168
Principal
27 satisfied customers
What tax form is filed to report dividends paid by US Corp?
What tax form is filed to report dividends paid by a US Corp which is owned by a Canadian Corp? I think it might be 1042S. I want to know the rate of WH.… read more
abci168
abci168
Principal
27 satisfied customers
We have a NOL carryover on our federal income taxes. While I
We have a NOL carryover on our federal income taxes. While I was working on our taxes this week, I noticed an error was made in 2013, 2014 and 2015 in the calculation of the NOL carryover. I neglected… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
If I work as an independent contractor under a foreign LLC
If I work as an independent contractor under a foreign LLC partnership in California, do I need to register as a foreign LLC in CA? The gross income from CA this year would be less than 50K. CA is NOT… read more
taxmanrog
taxmanrog
Master\u0027s Degree
698 satisfied customers
Same question on the taxation of interest and dividends (on
Same question on the taxation of interest and dividends (on mutual funds) earned inside a disclaimed portion trust ... disclaimer trust . The original owner of a trust passed and the spouse declined a… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2 FROM HER EMPLOYER WITH A TYPO IN THE SOCIAL SECURITY NUMBER. TO DATE THE EMPLOYER HAS NOT PROVIDED A "CORRECTED" FORM W-2. IS THERE AN IRS "… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
A taxpayer, Form 1040 Schedule C, is on the cash basis. The
A taxpayer, Form 1040 Schedule C, is on the cash basis. The average revenue for the last 5 years is $5,100,000. There is no inventory. The NAICS is 423600Can he remain on the cash basis?… read more
Lane
Lane
JD, CFP, MBA, CRPS
12,858 satisfied customers
US FEDERAL INCOME TAX. QUESTION: A SINGLE WOMAN OWNS A
US FEDERAL INCOME TAX. QUESTION: A SINGLE WOMAN OWNS A HOUSE, HER PRINCIPAL RESIDENCE, AND LIVES IN IT FOR 4 YEARS. IN 2017 SHE MARRIES A MAN WHO WILL ALSO USE IT AS HIS PRINCIPAL RESIDENCE BUT NOT HA… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
THE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS
tHE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS INCORRECT . i CAN NOT ACCERSS dD. p;EASE DVISE HOW I CAN ACEESS THE SCHEDULE … read more
Lane
Lane
JD, CFP, MBA, CRPS
12,858 satisfied customers
Form 1040 line #44 what taxes--federal income tax + social
form 1040 line #44 what taxes--federal income tax + social security +medicare tax, all or just federal? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x