Reference no: EM132929690
Dave (SSN 412-34-5670) and Alicia (SSN 412-34-5671) Stanley are married and retired at age 51. The couple's income consists of rental property, stock investments, and royalties from an invention. They sold their large house that they had purchased six years ago for $580,000 on October 18, 2019, for $1 million. They now live in a condo at 101 Magnolia Lane, Suite 15, Highland Park, FL 33853.
The rental property is an apartment complex (building cost $1.5 million and was purchased January 5, 2019) with 30 units that rent for $27,000 per month and are at 90% occupancy.
Rental Income: $291,000
Salaries: $115,000
Payroll Taxes: $8,798
Real Estate Taxes: $18,750
Interest: 45,000
Repairs and Maintenance: $29,000
Depreciation: (Calculate)
The following information is also for the year:
1099-INT: Old Bank: $22,000
1099-DIV: Dell, Inc.
Ordinary Dividends: $15,250
Qualified Dividends: $15,250
1099-DIV: IBM, Inc.
Ordinary Dividends: $8,650
Qualified Dividends: $8,650
1099-DIV: Pepsi, Inc.
Ordinary Dividends: $18,785
Qualified Dividends: $18,785
1099-MISC: Box 2 Royalties: $152,300
Dell (held 9 mo.)-
Purchased: 12/01/18
Sold: 09/01/19
Sale Price: $15,000
Basis: $9,000
Gain: $6,000
Pepsi (held 4 mo.)-
Purchased: 09/01/19
Sold: 12/29/19
Sale Price: $17,000
Basis: $25,000
Loss: $8,000
IBM (held 30 mo.)-
Purchased: 06/05/17
Sold: 12/05/19
Sale Price: $38,000
Basis: $20,000
Gain: $18,000
On January 3, 2020, Dave repurchased the exact number of shares he sold on December 29, 2019. The Stanleys paid $12,000 each quarter (four payments) in federal estimated income taxes.
Problem 1: Prepare Form 1040 for the Stanleys. Taxpayers had qualifying health care coverage at all times during the tax year.