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Prepare a 2016 Form 1040 for the individual below. Also prepare Schedules A, B, C, D, E, and Form 8949. All forms are available on irs.gov or on Google search engine if you type Form 1040 or Schedule A . PERSONAL INFORMATION & WAGES Keisha Sanders, a divorced single taxpayer and practicing attorney, lives at 9551 Oak Leaf Lane in Pine Cove, AZ 86035. Her social security number is 412-34-5670 (date of birth 2/27/1972). Her W-2 contained the following information: Wages (box 1) = $83,401.55 Federal W/H (box 2) = $ 9,782.15 Social security wages (box 3) = $83,401.55 Social security W/H (box 4) = $ 5,170.90 Medicare wages (box 5) = $83,401.55 Medicare W/H (box 6) = $ 1,209.32 In addition, Keisha Sanders made alimony payments totaling $9,600 for the year to her former husband Alex, an unemployed mine worker, whose social security number is 412-34-5671. He found an old girlfriend on Facebook from high school; that is why they got divorced. She made estimated tax payments this year of $10,000 each quarter of 2016. INTEREST AND DIVIDEND INCOME Hint: Interest and dividends go on Schedule B. She also received a 1099 INT reporting interest income from Pine Cove Credit Union in the amount of $204.75. She also has interest from a savings account with Local Neighborhood Bank of $250 and a dividend from a Form 1099-DIV of $1,600 in ordinary dividends, of which $1,350 are considered qualified dividends. STOCK SALES Hint: Use Form 8949 and Schedule D. She had the following stock transactions for the year: Stock Shares Date Purchased Date Sold Sale Price Cost Basis 5,500 7/8/15 9/12/16 $25,000 $18,000 800 3/12/16 10/21/16 43,000 47,000 2,800 2/13/09 10/21/16 30,000 22,000 She also owns 20 shares of Apple stock, which she purchased for $1,000 in 1979. It is now trading at $100,000. She is going to hold onto it for a while. HOME BUSINESS Hint: Use Schedule C. Schedule SE is for bonus points, but is not required. She also has a home cleaning business she runs as a sole proprietorship. The following are the results from business operations for the tax year 2016: Gross receipts $43,000 Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2016 Van (over 6,000 lbs) placed in service 1/01/2016, cost $27,000 Postage (500) Supplies (500) Phone (1,250) Rent (2,400) Insurance (2,800) Van expenses (4,500) Plastic surgery to be more attractive to customers (5,000) Business assets Date Purchased Cost Computer 5/18/16 $2,200 RENTAL PROPERTY Hint: Use Schedule E, page 1. She owned a home for investment home that was rented for the entire year and is located just one block over at 9021 Jasmine Way in the same town. The following income and expense information relates to the rental activity. Ignore the passive activity rules or limitations (Chapter 11). Rental income $27,600 Real estate taxes 7,952 Utilities 1,603 Mortgage interest 2,700 Repairs and maintenance 3,616 Cost of home, purchased March 10, 2014 300,000 PERSONAL EXPENSES Hint: Use Schedule A. She also has the following information on her personal and investment expenses: Interest expense
Home mortgage (qualified residence interest)	$8,100
MasterCard (used exclusively for personal expenses and purchases)	425
Car loan (personal use)	600
Student loan interest	1,750
Taxes paid
State income tax withheld	2,950
State income tax due with last years tax return	350
Real estate property taxesprincipal residence	1,700
Personal property taxescar	75
Medical expenses
Doctors fees	500
Prescription drugs	200
Health club fee	400
Charitable contributions (all required documentation is maintained)
Church, cash	3,100
United Way, cash	100
Red Cross, cash	200
Pine Cove Goodwillused clothing and household items, donated on 11/15/16
Thrift shop value at date of donation	450
Purchase price of the items	1,300
(You can skip Form 8283.) Other
Investment publications	150
Tax return preparation fee	275
Business dues and subscriptions	350
Safe deposit box	75

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