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Use the following information to complete Winnie Bay Goghs 2019 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Be sure to check for deductions and credits that are subject to phase out rules. You will need the following forms and schedules to complete the project: Form 1040, Schedule 1, Schedule 2, Schedule A, Schedule C, Schedule E, Schedule SE (use the short form), and Form 4562 (which I have completed for you). Please obtain these forms from www.irs.gov. You should be able to fill in the forms, save them, and email the required forms to me when you are ready to submit the assignment. Winnie Bay Gogh is single and has two children from her previous marriage to Wherediddy Gogh. Her daughter, Go Gogh, is 9 years old in 2019 and loves disco. She lives with Winnie, and Winnie provides more than half of her support. Hugh Gogh, the son, currently lives with his father and was with his father during all of 2019. Wherediddy provides more than half of Hughs support. Winnie tells you that the divorce agreement from June, 2016 stipulates that she must pay Wherediddy $400 per month until Hugh reaches age 18. At that time, the payments reduce to $150. If Wherediddy remarries, she will only have to pay the reduced amount of $250 per month until Hugh reaches age 18 and nothing after that. Winnie provides you with the following additional information: She wishes to contribute to the presidential election campaign. She lives at 523 Dontgo Drive in Salem, IN 46202 Winnies birthday is May 31, 1974 Gos birthday is October 5, 2010 Hughs birthday is December 1, 2003 Winnies social security number is 123-45-6789 Gos social security number is 005-61-7232 Hughs social security number is 004-23-3419 Wherediddys social security number is 111-22-3333 She does not have any foreign bank accounts or trusts 1. Winnie is employed as a nuclear engineer with Barton Olson Oversite Management, Inc. (BOOM). Her annual base salary is $90,000, BOOM has an extensive fringe benefits program for its employees Winnies pay stubs indicate that she had $8,230 withheld in federal taxes, $3,587 in state taxes, $5,695 in Social Security taxes, and $1,332 in Medicare taxes. Her compensation includes the following: a) Base Salary (before subtracting her pre-tax payments or adding any taxable fringe benefits) $90,000 b) Group term life insurance = $50,000 60 c) Group term life insurance > $50,000 97 d) Taking advantage of BOOMs educational assistance program, Winnie enrolled in four graduate engineering classes at a local college. BOOM paid her tuition, fees, and other course-related costs. 7,500 e) Winnie receives free parking in the companys security garage that would normally cost $70 per month. 840 f) BOOM has an employee wellness program at work and an on-site gym facility. Employees use of the gym for no charge. The value of the membership is $480 per year. 480 g) Winnies employer provides a qualified retirement plan (401k) at work. Winnies contributions are not included in her taxable income, but deducted from her salary on a pretax basis. Winnies employer matches Winnies contributions, thus contributing $8,000 during 2019. 8,000 (Winnie) 8,000 (BOOM) h) BOOM pays Winnies health insurance premiums. 6,000 i) Winnie pays the additional health insurance premiums to cover her children on a pretax basis. 1,500 j) Winnie manages the safety program for BOOM. In recognition of her superior handling of three potential crises during the year 2019, Winnie was awarded the Employee Safety Award on December 15, 2019. The company gave her a wrist watch. 300 k) Winnie received a Christmas bonus check in December. She did not cash the check until January, 2020. 1,000 Determine the amount of Winnies taxable compensation from BOOM and enter the amount on Line1 of the Form 1040 (page 2). 2. In addition to participating in BOOMs deferred retirement plan at work, Winnie also contributes $6,000 to a Roth IRA. - Roth IRA contributions arent taxed because the contributions you make to them are usually made with after-tax money, and you cant deduct them. Earnings in a Roth account can be tax-free rather than tax-deferred. So, you cant deduct contributions to a Roth IRA. However, the withdrawals you make during retirement can be tax-free. 3. On January 5, 2019, Winnies father died. From her fathers estate, she received stock valued at $30,000 (his basis was $12,000), a number of guns valued at $15,000 (his basis was $9,200), her fathers house valued at $120,000 (his basis in the house was $55,000), and cash of $25,000. As noted later in the problem, she used the cash to pay off her hospital bills from last year and get a face lift. 4. Winnie owns several other investments and in February 2019 received Form 1099s from her brokerage firm and bank reporting the interest and dividends earned on the investments for 2019. A summary of the information is below: Interest State of Indiana Bonds $650 First State Bank Certificate of Deposit 450 Ford Motor Company bonds 300 $450+300= $750 interest 8a taxable interest Dividends from various international stocks $700 *these are NOT qualifying dividends 5. Winnie slipped on some oil in a parking lot in front of a computer store last July. She broke her ankle and was unable to work for two weeks. She incurred $1,300 in medical costs, all of which were paid by the owner of the store. The store also gave her $1,000 for pain and suffering resulting from the injury. BOOM continued to pay her salary during the two weeks she was unable to work. Winnie had purchased a disability policy that provided her with $1,500 in disability pay for the time she was unable to work. 6. Winnie found a renter for her fathers house on August 1. The monthly rent is $600, and the lease agreement is for one year. The lease requires the tenant to pay the first and last months rent and a $600 security deposit. Winnie reimburses the security deposit at the end of the lease if the property is in good condition. On August 1, Winnie received $1,800 (first month, last month, and deposit) from the tenant per the terms of the lease agreement. The renters paid Winnie at the beginning of each month for the remainder of the year. Winnie provides you with the following additional information for the rental for 2019. Property taxes $770 Other maintenance expenses 285 Insurance expense 895 Management fee 350 Depreciation (see Form 4562-provided) The rental property is located at 35 Pleze-goa Way, Orono, Maine 04473. Winnie makes all decisions with respect to the property. (Use Schedule E for this income.) [Assume this property is strictly rental propertyWinnie has not lived in it at all under her ownership.] (Lines 21 and 22 of the Schedule E ask you to refer to additional forms or instructions if necessary. These forms are not necessary for Winnie to complete. You can just enter the profit or loss on these lines as indicated.) 7. Winnie sells real estate in the evening and on weekends. She runs her business from her home. Winnies house has 3,160 square feet and it contains an office (215 square feet) where she does administrative work, maintain financial records, and schedules appointments. She, of course, meets with clients and conducts her primary business at the various homes that are for sale. Winnie does not want to go through the hassle of keeping up with her home office expenses, so she would like to use the Simplified Method if she qualifies for the home office deduction. The name of her business is Gogh Gettum Real Estate. The federal identification number is 05-8799561. Her business code is 531210. Winnie has been operating in a business-like way since 2002 and has always shown a profit. She had the following income and expenses from her business: Commissions earned $36,800 Expenses: Advertising 2,200 Insurance 400 Real estate license 230 Legal and Professional services 6,200 Supplies 1,000 She has used her personal car in her business since she bought it on October 1, 2015. During 2019, she properly documented (in writing) 6,000 business miles (500 miles each month) for this job. The total mileage on her car (i.e. business and personal-use miles) during the year was 15,000 miles (including 1,120 miles commuting to and from her job at BOOM). In 2019, Winnie elects to use the standard mileage method to calculate her car expenses. She does not have another vehicle for personal use. She spent $145 on tolls and $135 on parking related to the real estate business. Enter her vehicle expenses on Line 9 of the Schedule C and complete the Page 2 related to vehicle expenses. (Use Schedule C for this income.) 8. Winnie received a federal income tax refund of $180 and a state income tax refund of $395 for the tax year 2018. She received both refunds in the current year. Her itemized deductions for 2018 were $19,430. ************************************************************************************ AT THIS POINT, YOU SHOULD TURN IN YOUR TAX RETURN AND VERIFY THAT YOU HAVE ADJUSTED GROSS INCOME CORRECT (Line 8b of the Form 1040) DUE 4/7 (12 points). You should have completed Form 1040 through Line 8b, Schedule 1, Schedule C, Schedule E, Schedule SE. Turn in all of these forms PLUS the Form 4562 that I provided to assist with Schedule E.

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