Acct 3210 Fall 2013 §002
2nd Tax Return Project
Part of the educational objective of this project is to enhance your understanding of how the different
tax forms are related to each other, and how amounts from one from one part of the form to a different
part of the same form or flow to another form. Therefore, all forms are to be completed manually. You
may not use a computer-based tax compliance software program in completing this assignment. Each
student is required to complete an original of the tax return forms. Also, you cannot use fillable forms.
You should complete your forms in blue ink or in pencils, something that is clearly distinguishable from
ink or photocopy.
You should turn in all of your workpapers supporting your conclusions. Such workpapers would normally
include forms that are not required for the return but that you used in calculating an amount for the
return, or copies of research that was done to determine or support a technical conclusion.
If you make an assumption about a technical matter, a matter that affects any item on the return or
omitted from the return, you should submit the research you did to support that assumption.
For students working in groups, it is not important that all students agree with the conclusions of other
members. Each student submits his or her own results.
Students may consult only with other members of the same group. You may not seek the advice of
individuals outside of your group, meaning that students may also not seek the advice of anyone outside
the class. You can do online research, but you may not post questions or seek online solutions to
questions specific to the facts of this assignment.
If you elected to work alone and you decide that you would instead prefer to work in a group, please
advise me in advance of all members of the group. I will respond with a written acknowledgement and
approval. Until you have that acknowledgement and approval, you are not authorized to work in the
group.
All assignments are due at the start of class on the due date. Because we will be reviewing the solution
in class, late submissions will not be accepted without advance written approval from the instructor.
Such approval will not be granted easily and will be accompanied by a penalty of 20 points for each
calendar day or fraction thereof.
_____________________________________________________________________________________
Acct 3210 Fall 2013 §002
2nd Tax Return Project
I have read the requirements on the preceding page, and I affirm that the work I am submitting is
entirely my own work or my work in collaboration only with other members of my group. Also, even
though the attached represents my work or the work of my group, I affirm that I have not helped any
other class member with this assignment. I understand that any violation of these requirements will be
considered as a violation of the College’s Honesty Policy, and I may receive a score of zero for this
assignment.
Print Name Signature
Acct 3210 Fall 2013 §002
2nd Tax Return Project
Page 1
Please complete the required federal individual income tax return forms for the following taxpayer.
Unless instructed otherwise, the information provided is for the taxpayer’s 2012 tax year. Please
complete his 2012 tax return. Ignore the requirement to attach the form(s) W-2.
Bob Grant is unmarried and lives in Lexington, Kentucky. Bob’s wife died in 2009, leaving him with three
children Alyssa, now age 19, Jared, now age 15 and Katherine, now age 12.
? Bob’s Social Security number is 987-45-1234
? Alyssa’s Social Security number is 412-32-4537
? Jared’s Social Security number is 412-32-5690
? Katherine’s Social Security number is 412-32-6940
? The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502.
? Jared and Katherine are tax dependents for federal tax purposes
Alyssa is a full-time student at the University of Lexington. Bob provided all of her support. During 2012,
Bob paid $11,000 in tuition expenses, $7,300 in Room and Board expenses, and $1,875 for books.
Bob Grant received the following wages during the year:
Employer
Gross Wages
(salary and bonus)
Federal Income Tax
Withholding
State Income Tax
Withholding
National Storage $166,200 $33,979 $8,750
All applicable and appropriate payroll taxes were withheld by Bob’s employer.
Bob has an online business that he conducts, mostly on week-ends. The following receipts and
expenditures are from that online business:
Gross Receipts $25,000
Cost of Merchandise Sold 10,000
Operating Expenses:
? Advertising $1,450
? Insurance-Professional $750
? Travel & lodging while out of town at shows $2,200
? Meals while out of town $475
? Supplies $800
? Legal and professional fees $550
Ignore considerations of depreciation/cost recovery, home office expenses or inventories
Acct 3210 Fall 2013 §002
2nd Tax Return Project
Page 2
In addition to his wages and his online business, Bob also received the following income during the year:
Dividend income, including $3,500 of Qualified Dividends, $3,975
Interest Income from First Kentucky Bank $130
Interest Income from City of Lexington, KY Bond (Private activity bonds) $900
Interest Income from U.S. Treasury Bond $675
Interest Income from Nevada State School Board Bond $150
During the year, Bob settled a lawsuit related to an auto accident in an earlier year. He received the
following payments:
Unreimbursed Medical Expenses:
Bob was not able to deduct these because of the % of AGI threshold. $2,500
Emotional Distress $12,000
Punitive Damages $10,000
Total receipts $24,500
Bob purchased an annuity 8 years ago and began receiving payments this year. The cost of the annuity
contract was $88,000. It will pay him $15,000 per year for ten years (beginning with this year). The
$15,000 payment was reported to Bob on a form 1099-R (box 7 contained an entry of “7” on the form).
Bob Grant paid or incurred the following expenses (payment was during 2012 unless noted otherwise):
Dentist/Orthodontist (unreimbursed by insurance) $8,500
Doctors (unreimbursed by insurance) $ 625
Prescriptions (unreimbursed by insurance) $ 380
KY state tax payment made on 4/15/12 for 2011 liability $1,200
KY state tax payment made on 4/15/13 for 2012 liability $1,600
Real property taxes on residence $5,800
Vehicle property tax based upon age of vehicle $250
Mortgage interest on principal residence $8,560
Home equity loan interest. The principal amount of the loan is $125,000.
None of the proceeds were applied to acquire or substantially improve the
home or for business or investment. The loan amount is less than the
excess of the market value of the home over the acquisition indebtedness. $7,500
Interest paid on funds borrowed to purchase the City of Lexington, KY
municipal bonds $400
Interest paid on funds borrowed to purchase U.S. Treasury bonds $240
Cash contribution to the Red Cross $1,000
Contributions to Senator Rick Hartley’s Re-election Campaign $1,200
Cash Contributions to First Baptist Church of Kentucky $6,000
Acct 3210 Fall 2013 §002
2nd Tax Return Project
Page 3
In addition, Bob drove 6,750 miles commuting to work at National Storage. Bob has represented to you
that he maintained careful logs to support the mileage.
In April, Bob drove a total of 465 miles to receive medical treatment for Jared at a hospital.
The Grants’ personal residence was burglarized on October 1, 2012. The theft occurred during the day
while Bob was at work and the children were at school. None of the stolen property was related to
Bob’s online business. The following personal property was stolen:
Item
Purchase
Date
Fair Value
on Date of
Theft
Tax Basis of
Item
Insurance
Reimbursement
Received
Laptop computer and Printer 09/01/2012 3,000 3,000 500
Rifle 03/01/2010 2,000 2,500 500
TV/Projector 03/01/2010 5,000 13,000 1,000
2005 Honda Pilot 07/01/2011 4,000 6,500 500
Bob Grant has a $4,500 short term capital loss carryover coming into the 2012 tax year. During 2012, he
had the following Securities Transactions:
Description Date
Acquired Date Sold Adjusted Basis Net Proceeds
100 shares Stock ABC Corp 7/31/2007 6/28/2012 $10,200 $24,700
150 shares Stock GHI Corp 7/8/2011 6/28/2012 12,000 11,100
$5,000 Bonds issued by ZYX Corp., * 6/22/2010 3/15/2012* 4,350 5,000
200 Shares Stock MNO Corp 3/16/2012 7/31/2012 15,000 12,500
300 Shares Stock MNO Corp 8/24/2012 N/A 13,000 N/A
* The ZYX Corp bonds were purchased in the secondary market. Par is $1,000; they were purchased for
$870 per thousand. They were due and were redeemed on March 15, 2012
Bob wants to contribute to the Presidential Election Campaign. He would like to receive a refund (if any)
of any tax he may have overpaid for the year. His preferred method of receiving the refund is by check.
Bob did not own, control or manage any foreign bank accounts nor was he a grantor or beneficiary of a
foreign trust during the tax year.

ScholarMatic: Explanation & Answer

Your ready answer from a verified tutor is just a click away for as little as $14.99

---

  

Click Order Now to get 100% Original Answer Customized to your instructions!