Comprehensive Problem $4-2$A

Dr$.$ Theodore E$.$ Lariat is a single taxpayer born on September $22,1973.$ He lives at $45$ Mountain View Dr$.,$ Apt. $321,$ Spokane, WA $99210.$ Dr$.$ Lariat's Social Security number is $775-88-9530.$ Dr$.$ Lariat works for the Pine Medical Group, and his earnings and income tax withholding for $2021$ are reported on the W$-2$ form $($see separate tab$).$

Dr$.$ Lariat owns a rental house located at $672$ Lake Street, Spokane, WA $99212.$ The house rents for $$1,000$ per month and was rented for the entire year. The following are the related expenses for the rental house:

Real estate taxes $$6,000$

Mortgage interest $14,500$

Insurance $2,200$

Depreciation $($assume fully depreciated$)0$

Repairs $600$

Maintenance $2,000$

The house was purchased on July $5,1986.$ Dr$.$ Lariat handles all rental activities $($e$.$g$.,$ rent collection, finding tenants, etc.$)$ himself. He spends about $10$ hours per month on the rental.

In $2021,$ Dr$.$ Lariat sold his primary residence as he wished to move to an apartment to avoid the maintenance and upkeep of a single$-$family home. Dr$.$ Lariat's home sold on February $12,2021$ for $$345,000$ net after commissions. He acquired the home on June $3,2003$ for $$260,000$ and had made improvements of $$10,000.$

Dr$.$ Lariat did not receive an EIP in $2021.$

Required:

Complete Form $1040$ and the schedules and forms provided for Dr$.$ Lariat.

The taxpayer had health coverage for the entire year.

The taxpayer does not want to make contribution to the presidential election campaign.

Do not complete Form $4562$ for reporting depreciation.

Make realistic assumptions about any missing data.

If an amount box does not require an entry or the answer is zero, enter $"0".$

If required, round any amount to the nearest dollar.

Enter all amounts as positive numbers except for the following special instructions: If required, on Form $1040,$ line $7$a and on Schedule E$,$ on lines $21,25,$ and $26,$ use the minus sign to indicate a loss.

On Form $8582,$ if required, use the minus sign to enter a "loss" as a negative number on the lines $1$d$,4,16.$ However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.