Comprehensive Problem 4-1 Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a homemaker and Walter is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700- 01-0002. Neither are age 65 or older. The Blacks provide all the support for Skylar's mother, Rebecca Backin (Social Security number 411-66-2121), who lives in a nursing home in Reno, NV and has no income. Walter's father, Alton Black (Social Security number 343-22-8899), lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $7,500 in 2018, the Blacks provide over half of Alton's support. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2018. They originally paid $76,000 for the home on July 3, 1993, but managed to sell it for $604,000. They spent $13,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home. The school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2 (see separate tab). Walter's previous job, as a high school teacher in Maine, was only 5 miles from his home. Skylar was unemployed prior to the move. The Blacks received a 1099-DIV from their mutual fund investments (see separate tab) The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2018 and used by the Blacks for 16 days. Pertinent information about the condo rental is as follows: $12,000 8,600 Rental income Mortgage interest reported on Form 1098 Homeowners' association dues Utilities Maintenance Depreciation (assume fully depreciated) 5,200 1,200 3,800 The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo. Required: Complete Form 1040 and the schedules and forms provided for the Blacks. Assume the taxpayers had health coverage for the entire year. Neither taxpayers wants to contribute to the presidential election campaign. If an amount box does not require an entry or the answer is zero, enter "0". Do not round any percentages. If required, round your answers to the nearest dollar. If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers. Special instructions for Form 8582: If required, use the minus sign to enter a loss as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts. Form W- Department of the Treasury - Internal v Wage and Tax Revenue Service Statement 2018 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service The Blacks received the following 1099-DIV from their mutual fund investments: CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, country ZIP or foreign postal code, and telephone ne OMB NO. 1545-0110 la Total ordinary ends $1,400.00 2018 Dividends and Distributions 1b Qualified dividends Cyber Funds Equities Fund 41 Wall Street New York, NY 10005 Form 1099- $ 998.00 2a Total capital gain DIV 2b Unrecap Sec 1250 gain $ 6,543.12 2c Section 1202 gain PAYER'S TIN RECIPIENT'S TIN I 2d Collectibles (284) gain 222-43-7690 1234326 RECIPIENT'S name 3 Nondividend distributions Copy B 4 Federal income tax withheld Skylar , Black For Recipient 5 Section 199A dividends 16 Investment expenses Street address (including apt. no.) 7 Foreign tax paid 883 Scrub Brush Street #52B country or US city or town, state or province country, and ZIP or foreign postal This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported code distributions 10 Noncash quidation distributions Las Vegas, NV 89125 11 Exempt interest FATCA and vidends requirement 12 Specified private activity bond interest dividends Account number (see instructions) 13 State 14 State 15 State tax identification withheld Schedule E Complete the Blacks' Schedule E. SCHEDULE OMB No. 1545-0074 (Form Supplemental Income and Loss 1040) (From rental real estate, royalties, partnerships, S Department corporations, estates, trusts, REMICS, etc.) 2018 of the Attach to Form 1040, 1040NR, or Form 1041. Treasury Attachment Go to www.irs.gov/Schedule for instructions and the Internal Sequence latest information. No. 13 Revenue Service (99) Your social security Name(s) shown on return number Walter and Skylar Black 700-01-0002 Part T Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C or C-EZ (see instructions). If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40. Did you make any payments in 2018 that would require you to file Form(s) 10997 (see instructions) No Yes B If "Yes," did you or will you file required Forms 1099? No 1a Physical address of each property (street, city, state, ZIP code) A123 Buncombe Lane, Brian Head, UT 84719 0 Type of 2 For each rental real estate property listed above, Fair Property Personal report the number of fair (from list Rental Use Days rental and personal use Days below) days. Check the QJV box only if you meet the A 184 16 requirements to file as a qualified joint venture. See instructions. Type of Property: 1 Single Family 3 Vacation/Short- 5 Land 7 Self-Rental Residence Term Rental 2 Multi-Family 4 Commercial 6 Royalties 8 Other (describe) Residence Income: Properties: Rents received ............ 3 12,001 Royalties received ....... Expenses: Advertising .... . 5 Auto and travel (see instructions)...la Cleaning and maintenance ... Commissions ......... Insurance . . . . . . . . . . . . . Legal and other professional fees. Management fees ....... Mortgage interest paid to banks, etc (see instructions) Other interest ........ Repairs.. Supplies ........ Taxes....... Utilities ... ... Depreciation expense or depletion.. 20 Other Homeowners' dues 19 (list) Total expenses. Add lines 5 through 19 21 Subtract line 20 from line 3 (rents) and/or 4 (royalties). If result is a (loss), see instructions to find out if you must file Form 6198.... 22 Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) ........ 22 Total of all amounts reported on line 3 for all rental 23a 23a 12,001 properties...... Total of all amounts reported on line 4 for all royalty properties .... Total of all amounts reported on line 12 for all properties Total of all amounts reported on line 18 for all properties........ Total of all amounts reported on line 20 for all 23el properties ........ Income. Add positive amounts shown on line 21. Do not include any losses .... Losses. Add royalty losses from line 21 and rental real estate losses from line 22. Enter total losses here 26 Total rental real estate and royalty income or (loss). Combine lines 24 and 25. Enter the result here. If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Schedule 1 (Form 1040), line 17, or Form 1040NR, line 18. Otherwise, include this amount in the total on line 41 on page 2 For Paperwork Reduction Act Notice, see the Cat. No. Schedule E (Form separate instructions. 11344 1040) 2018 Comprehensive Problem 4-1 Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a homemaker and Walter is a high school teacher. His W-2 form is located on the next tab. Skylar's Social Security number is 222-43-7690 and Walt's is 700- 01-0002. Neither are age 65 or older. The Blacks provide all the support for Skylar's mother, Rebecca Backin (Social Security number 411-66-2121), who lives in a nursing home in Reno, NV and has no income. Walter's father, Alton Black (Social Security number 343-22-8899), lives with the Blacks in Las Vegas. Although Alton received Social Security benefits of $7,500 in 2018, the Blacks provide over half of Alton's support. The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2018. They originally paid $76,000 for the home on July 3, 1993, but managed to sell it for $604,000. They spent $13,000 on improvements over the years. They are currently renting in Las Vegas while they look for a new home. The school district reimbursed Walter $550 for moving expenses. These are reflected on his W-2 (see separate tab). Walter's previous job, as a high school teacher in Maine, was only 5 miles from his home. Skylar was unemployed prior to the move. The Blacks received a 1099-DIV from their mutual fund investments (see separate tab) The Blacks own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 184 days during 2018 and used by the Blacks for 16 days. Pertinent information about the condo rental is as follows: $12,000 8,600 Rental income Mortgage interest reported on Form 1098 Homeowners' association dues Utilities Maintenance Depreciation (assume fully depreciated) 5,200 1,200 3,800 The above amounts do not reflect any allocation between rental and personal use of the condo. The Blacks are active managers of the condo. Required: Complete Form 1040 and the schedules and forms provided for the Blacks. Assume the taxpayers had health coverage for the entire year. Neither taxpayers wants to contribute to the presidential election campaign. If an amount box does not require an entry or the answer is zero, enter "0". Do not round any percentages. If required, round your answers to the nearest dollar. If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers. Special instructions for Form 8582: If required, use the minus sign to enter a loss as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts. Form W- Department of the Treasury - Internal v Wage and Tax Revenue Service Statement 2018 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service The Blacks received the following 1099-DIV from their mutual fund investments: CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, country ZIP or foreign postal code, and telephone ne OMB NO. 1545-0110 la Total ordinary ends $1,400.00 2018 Dividends and Distributions 1b Qualified dividends Cyber Funds Equities Fund 41 Wall Street New York, NY 10005 Form 1099- $ 998.00 2a Total capital gain DIV 2b Unrecap Sec 1250 gain $ 6,543.12 2c Section 1202 gain PAYER'S TIN RECIPIENT'S TIN I 2d Collectibles (284) gain 222-43-7690 1234326 RECIPIENT'S name 3 Nondividend distributions Copy B 4 Federal income tax withheld Skylar , Black For Recipient 5 Section 199A dividends 16 Investment expenses Street address (including apt. no.) 7 Foreign tax paid 883 Scrub Brush Street #52B country or US city or town, state or province country, and ZIP or foreign postal This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported code distributions 10 Noncash quidation distributions Las Vegas, NV 89125 11 Exempt interest FATCA and vidends requirement 12 Specified private activity bond interest dividends Account number (see instructions) 13 State 14 State 15 State tax identification withheld Schedule E Complete the Blacks' Schedule E. SCHEDULE OMB No. 1545-0074 (Form Supplemental Income and Loss 1040) (From rental real estate, royalties, partnerships, S Department corporations, estates, trusts, REMICS, etc.) 2018 of the Attach to Form 1040, 1040NR, or Form 1041. Treasury Attachment Go to www.irs.gov/Schedule for instructions and the Internal Sequence latest information. No. 13 Revenue Service (99) Your social security Name(s) shown on return number Walter and Skylar Black 700-01-0002 Part T Income or Loss From Rental Real Estate and Royalties Note: If you are in the business of renting personal property, use Schedule C or C-EZ (see instructions). If you are an individual, report farm rental income or loss from Form 4835 on page 2, line 40. Did you make any payments in 2018 that would require you to file Form(s) 10997 (see instructions) No Yes B If "Yes," did you or will you file required Forms 1099? No 1a Physical address of each property (street, city, state, ZIP code) A123 Buncombe Lane, Brian Head, UT 84719 0 Type of 2 For each rental real estate property listed above, Fair Property Personal report the number of fair (from list Rental Use Days rental and personal use Days below) days. Check the QJV box only if you meet the A 184 16 requirements to file as a qualified joint venture. See instructions. Type of Property: 1 Single Family 3 Vacation/Short- 5 Land 7 Self-Rental Residence Term Rental 2 Multi-Family 4 Commercial 6 Royalties 8 Other (describe) Residence Income: Properties: Rents received ............ 3 12,001 Royalties received ....... Expenses: Advertising .... . 5 Auto and travel (see instructions)...la Cleaning and maintenance ... Commissions ......... Insurance . . . . . . . . . . . . . Legal and other professional fees. Management fees ....... Mortgage interest paid to banks, etc (see instructions) Other interest ........ Repairs.. Supplies ........ Taxes....... Utilities ... ... Depreciation expense or depletion.. 20 Other Homeowners' dues 19 (list) Total expenses. Add lines 5 through 19 21 Subtract line 20 from line 3 (rents) and/or 4 (royalties). If result is a (loss), see instructions to find out if you must file Form 6198.... 22 Deductible rental real estate loss after limitation, if any, on Form 8582 (see instructions) ........ 22 Total of all amounts reported on line 3 for all rental 23a 23a 12,001 properties...... Total of all amounts reported on line 4 for all royalty properties .... Total of all amounts reported on line 12 for all properties Total of all amounts reported on line 18 for all properties........ Total of all amounts reported on line 20 for all 23el properties ........ Income. Add positive amounts shown on line 21. Do not include any losses .... Losses. Add royalty losses from line 21 and rental real estate losses from line 22. Enter total losses here 26 Total rental real estate and royalty income or (loss). Combine lines 24 and 25. Enter the result here. If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Schedule 1 (Form 1040), line 17, or Form 1040NR, line 18. Otherwise, include this amount in the total on line 41 on page 2 For Paperwork Reduction Act Notice, see the Cat. No. Schedule E (Form separate instructions. 11344 1040) 2018