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Beth First lives at 1040 Oak Lane, Stony Hill, NY 10000, and her Social Security number is 123-45-6789. Beth is single and has a 20-year-old son,...
Beth First lives at 1040 Oak Lane, Stony Hill, NY 10000, and her Social Security number is 123-45-6789. Beth is single and has a 20-year-old son, Andy. His Social Security number is 111-11-1112. And lives with Beth, and she fully supports him. Andy spent 2017 traveling in Europe and was not a college student. He had gross income of $4,655 in 2017. Andy paid $4,000 of lodging expenses that Beth reimbursed after they were fully documented. Beth paid the $4,000 to Andy using a check from her sole proprietorship. That amount is not included in the items listed below.
Beth owns Bear Enterprises, LLC sole proprietorship, a data processing service (98-7654321), which is located at 456 Hill Street, Stony Hill, NY 10000. The business activity code is 514210. Her 2017 Form 1040, Schedule C for Bear Enterprises shows revenues of $315,000, office expenses of $66,759, employee salary of $63,000, employee payroll taxes of $4,820, meals and entertainment expenses (before the 50% reduction) of $22,000, and rent expense of $34,000. The rent expense includes payments related to renting an office ($30,000) and payments related to renting various equipment ($4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Beth personally purchases health insurance on herself and Andy. The premiums are $23,000 per year.
Beth has an extensive stock portfolio and has prepared the following analysis:
Stock
Number of Shares
Date Purchased
Date Sold
Per-Share Cost
Per-Share Selling Price
Total Dividends
Bright
10
10/18/15
10/11/16
$80
$ 74
$30
Gold
30
10/11/09
10/11/16
43
157
70
Pink
15
3/10/16
8/11/16
62
33
45
Repeated from Schedule Above (in case you can't red it) Total Dividends Received in 2017:
Bright $30
Gold $70
Pink $45
NOTE: Beth received a Form 1099-B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual dividends received in 2017, and these are both ordinary dividends and qualified dividends.
Beth had $800 of interest income from State of NY bonds and $600 of interest income on her Stony Hill Savings Bank account. She paid $25,000 of alimony to her former husband. His Social Security number is 123-45-6788.
Beth itemizes her deductions and had the following items, which may be relevant to her return:
Item
Amount
Comment
Unreimbursed medical expenses for Beth(all for visits to doctors)
$1,786
Does not include health insurance premiums.
State income taxes paid
1,830
Real property taxes on personal residence
3,230
Interest paid on home mortgage (Form 1098)
8,137
The loan is secured by the residence and was incurred when the home was purchased.
Charitable contributions
1,399
$940 cash payments to Ashley's church and $459 cash payments made to homeless persons for whom she felt sorry. She can document all the expenditures.
Sales taxes
619
Amount per sales tax table.
Beth made a $30,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2018 taxes.
Compute Beth's net tax payable or refund due for 2017. If you use tax forms for your computations, you will need Form 1040 and its Schedules A, C, D, and SE and Forms 8949 and 6251.
You must prepare the 1040, Schedules A, C, D & SE. Forms 8949 & 6251. You may use tax software or manually prepare their tax return.
You may prepare the NYS return, for extra credit. Assume she was a NYS residents for the entire year.
You must submit all forms and schedules as PDF files, using the Dropbox in BB. Submit by the deadline date and time. No late work will be accepted
