Prepare benjamin and rachel tax return

Assignment Help Taxation

Reference no: EM131917493

COMPREHENSIVE PROBLEM -

Benjamin Warren and his wife Rachel will be filing a joint return this year. Personal information on the couple is as follows:

Benjamin-Age 36, social security number 010-40-0101

Rachel-Age 35, social security number 020-40-2020

Children-Three, ages 3-12. They claim them as dependents.

Benjamin is an attorney working for a large corporation and earns a salary of $75,000. Rachel is a dentist and earns $88,000 working for a dental corporation. Benjamin and Rachel also moonlight on the weekends and their records show the following:

Gross billings	$24,000
Expenses:
Dues and publications	1,150
Rent expense	4,250
Bank charges	100
Copying charges	850
Printing charges	350
Computer expenses	1,550
Office expenses	500
Secretarial expenses	3,000
Travel	285
Telephone charges	750

Benjamin and Rachel each have an IRA and each contributes the maximum allowed per year. However, this year Benjamin mailed in his check for $2,000 on December 15 and it never arrived at the bank. He went to the bank on January 16, 2017, and made out a new check.

During the year, the Warrens received the following dividends and interest income:

General Corporation	$800
Pure Dog Food, Inc.	650
National City Bank (interest)	1,400
State of New York Bonds (interest)	750
Great Britain Motors (foreign corp.)	650
Series EE Bond	125

Rachel is a very big believer in owning real estate. She convinces Benjamin that they should invest in apartment buildings. During the year, the following transactions were recorded:

Rental income	$22,000
Expenses:
Depreciation expense	4,000
Painting	2,000
Plumbing	1,000
Utilities	2,500
Mortgage interest on buildings	4,000
Property taxes	2,600
Cleaning and repairs	1,200
Insurance	750
Management fees	375
Advertising vacant apartments	175

Benjamin requires all new tenants to make a security deposit when they move in. The deposit is credited towards their last month's rent. This year, they received $800 in security deposits.

During the year, Benjamin and Rachel made the following expenditures:

Medical expenses	$1,200
State and local income taxes	6,500
Real estate taxes	3,500
General sales taxes (actual)	2,250
Home equity loan	500
Home mortgage interest	11,000
Charge card interest	650
Cash contributions	3,300
Contribution of clothing to Goodwill	650

Also, Rachel took a continuing education course at the local university in order to renew her dental license. The tuition for the course was $275 and her books cost her $65tRachel's IRA is with a local stock brokerage firm and they charged her a $25 fee for administering her account.

On June 1 the Warrens sold Generous Trading Corp. stock for $4,600. They had purchased the stock on May 16, 1988, for $3,800. Also, they -sold Goodluck Goldmine's stock for $5,400 on December 1, 2017. They had purchased this stock on June 23, 1987, for $2,800. Benjamin and Rachel had purchased a summer home in the mountains on May 8, 1985, for $45,000 but they used it very little. They sold it on July 14 of this year for $65,000.

Prepare Benjamin and Rachel's tax return for 2017. On Fill in Form 1040 and Schedules A, C, D, E and SE.

Reference no: EM131917493

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