Read the case on which your Portfolio Project is based anddetermine all items that will be excluded from gross income. In aMS Excel spreadsheet, list all excluded items in column A. Incolumn B, explain why the item is excluded. You may reference thespecific tax law, the text (make sure you include the page number),or a link to another trusted source. A trusted source is eithersupported by the IRS or academic literature (that includestextbooks) under which tax law for the year 2017 is applicable.

This assignment should be delivered using the MS Excel spreadsheetthat lists the excluded items and the supporting information onwhich your decision is based.

ACT405 – Portfolio Project Case 1

Comprehensive Tax Problem – Option 1

Taxpayer Information

               Name:   John Washington

               Address:   3450 Green St.

                                   Miami, FL 54321

               DOB:   5/5/1960

               Filing Status: Married

               SSN: 434-20-2020

               Occupation: Engineer

               Name: Debra Washington

               Address: 3450 Green St.

                                  Miami, FL 54321

               DOB: 7/7/1962

               Filing Status: Married

               SSN: 411-21-4568

               Occupation: Teacher

INCOME INFORMATION:

               Wages and Compensation

The following information is takenfrom John Washington’s 2017 Form W-2 Wage and Tax Statement:

                                               

Box 1 – Wages, tips, and other compensation	80,000
Box 2 – Federal Withholding	12,500
Box 17 – State Income Tax Withholding	2,000

                               

The following information is takenfrom Debra Washington’s 2017 Form W-2 Wage and Tax Statement:

                                               

Box 1 – Wages, tips, and other compensation	42,000
Box 2 – Federal Withholding	3,500
Box 17 – State Income Tax Withholding	750

               Interest and Dividends

               John had interest income from a savings account from Everest Bankof $500.00

               Debra had dividend income of $550 from Blue Co. stock.

               Capital Gains

               John had the following stock transactions in 2017:

He sold 1,000 shares of Apex Co. for $12,000 on June 7, 2017, which he purchased on April 1, 2017 for25,000

               Rental Real Estate

The couple owns a rent house which hepurchased on July 1, 2014. The income and expenses of the rentalreal estate unit are as follows:

                               Rentalincome                                  $12,000

                               Property taxes                             $1,500

                               Depreciation                                  $1,000

                               Repairs andMaintenance            $750

                               Insurance                                           $2,000

Other Transactions in 2017

1. Debra had educator expenses in 2017of $450.00

2. John had gambling winnings of$1,000.

3. John was the beneficiary of hismother’s life insurance policy.

His mother died in 2017 and hereceived $50,000 under this policy.

               4. Debra paid $700 in student loan interest.