Reference no: EM131328779
Assignment
Paige Turner is single and has two children from her previous marriage. Ali, her daughter, lives with Paige and provides more than half of her support. Leif lives with his father, Will (Leif lived with Will for the entire year.) Will provides more than half of Leif's support. Paige pays "alimony" of $400 per month to Will. The payments will continue until Leif reaches age 18 and then they will be reduced to $150. The following information is provided by Paige:
• Her address is 523 Essex Street, Bangor, ME 04401
• Her birthday is May 31, 1972 and her SS # is 007-16-4727
• Ali is 11 (SS # 005-67-6666) and Leif is 13 (SS #004-56-5559).
• Will does not live with Paige and Ali. His SS # is 200-12-2222.
Paige is a nuclear engineer with Atom Systems Consultants, Inc. Her annual salary is $95,000. She had federal withholding of $10,230, state withholding of $4,495. All other taxes were withheld at legal amounts.
Out of her $95,000 salary she contributed $7,000 to a 401(k) plan and $3,600 was put in to a flexible spending plan for medical expenses. During the year, Paige enrolled in two graduate engineering classes at a local college. Her employer paid for her tuition and fees amounting to $2,300.
The firm also paid for a life insurance policy that has a benefit of $200,000 to Paige's children.
Paige's company paid for her to parking expenses. This would have cost her $200 a month if she paid it out-of-pocket. She feels this is an important benefit because the garage has a security guard.
Paige manages the safety program for her company. In recognition of her superior handling of this program the company awarded her $500. She received the cash award in January 2011 despite the recognition ceremony being held in December of the prior year.
On January 15th, Paige's father died. She inherited, the following items:
• Stock valued at $30,000 which was purchased on March 15, 2000 for $12,000
• Personal Residence valued at $90,000 which he purchased 25 years ago for $25,000. Paige has put the house on the market for $100,000 but it has not sold yet. The realtor said the land would be worth $20,000 and the house is worth $70,000.
Paige had the following investment income for the year:
Dividends: Ordinary Dividend Qualified Dividend
General Dynamics $300 $300
Casill Corp $100 $100
Disney $500 $500
Vanguard Windsor Fund $800 $525
Interest:
New Jersey Economic Development Bonds $300
IBM Bonds $700
State of Nebraska Bonds $200
Paige also owns 1,000 shares of a Sub Chapter S Corporation. The business has 10,000 shares outstanding and Paige has owned the stock for several years. This year the company had $200,000 in taxable income and paid a distribution of $5 per share. Grubstake, Inc's tax id # is 45-4567890.
Paige sold the following investments during the year:
Date Sold Date Purch. Sales Price Cost Basis
Nebraska Bonds 3/14/2011 10/22/05 $2,300 $1,890
Casill Corporation 10/20/11 2/19/10 $8,500 $9,760
Paige found a renter for her father's house on August 1. The monthly rent, and the lease agreement is for one year. The lease requires the tenant to pay the first and last months' rent and a $400 security deposit. The security deposit is to be returned at the end of the lease if the property is in good condition. On August 1, Paige received $1,200 from the tenant per the terms of the lease agreement. In November, the plumbing froze and several pipes burst. The tenant had the repairs made and paid the $300 bill. In December, he reduced his rental payment to $100 to compensate for the plumbing repairs. Paige provides you with the following additional information:
Property Taxes $770
Other Maintenance Expenses $285 (not plumbing repairs)
Insurance Expense $495
Legal Fee $350 (to draw up first lease)
Paige paid $2,050 in real estate taxes on her principal residence. She also paid $7,100 of mortgage interest and $435 of home equity interest in which the proceeds were used to pay off credit card bills.
Paige incurred the following medical expenses:
Dentist $310
Doctor $390
Prescription Drugs $215
Over-the-Counter $140
Optometrist $125
Emergency Room $440
LASIK eye surgery $2,000
Chiropractor $265
She submitted all the expenses for reimbursement from her flexible spending plan and received $3,600.
Paige contributed clothing to the Salvation Army. The original cost of the clothing was $740. She feels the value of the clothing would be $300. In addition she made the following cash contributions:
Larkin College $850
United Way $125
Amos House (Homeless Shelter) $200
Local Fire Company $100
Paige also paid $295 for business publications other than those paid for by her employer and $325 for a local CPA to prepare her tax return last year.