Reference no: EM13221244

All the following are for year 2013 and state of Texas

1. The Simpsons also own a rent home that they rent out (Actively Participate) to people unrelated to them. 

The Simpsons originally began to rent this home on May 1, 1994 when its depreciable basis was $30,000 (total cost of $37,500 less $7,500 allocated to the Land (Straight-Line Depreciation not elected)). 

Relevant information that pertains to the rent home for 2013 is as follows:

Total Rental Revenues $5,600

EXPENSES
Insurance 760
Mortgage Interest 1,980
Repairs 460
Property (Real Estate) Taxes 1,020
Lawn Maintenance 320


(All of the above Rental Revenues and Rental Expenses represent Cash transactions that occurred during the year of 2013)

In addition to the above, Mr Simpson drove in 2013 his personal automobile, a 2010 Chevrolet Caprice, in attending to the rental property a total of 400 miles (33.33 miles per month). Mr Simpson has always used the Standard Mileage Method (Automatic Mileage Method) in recovering the cost of using his automobile.

Finally, on June 19, 2013, the SImpsons purchased new appliances (ie. refrigerator, stove and dishwasher) (five-year property) for the Rental Property for a total purchase price of $1,950.

What would Schedule E look like for the above? (with explanation or depreciation wksht)

2. Marge uses the Cash Method Of Accounting for Federal Income Tax purposes for her business, MARGE'S BOOKSTORE, and the business code for the business for Federal Income Tax purposes is 451211. Relevant Financial Information for the business for 2013 is as follows:
Gross Sales $126,800
Less: Returns And Allowances 2,350

Expenses
Accounting Services $ 1,800
Advertising 2,500
Salaries And Wages 28,720
Payroll Taxes 2,866
Office Rent 10,800
Entertainment Of Customers 500
Interest (Miscellaneous Debts) 600
Seminar (Related To Bookstore Retailers) 400
Supplies 1,450
Telephone 1,600
Utilities 1,300

INVENTORY
Beginning Inventory January 1, 2013 $28,400
Ending Inventory December 31, 2013 16,800
Purchases In 2013 12,900

All Inventory is valued at cost. There were no changes in determining quantities, costs or valuations between Opening and Closing Inventory.

(All of the above Revenues, Expenses and Expenditures represent cash transactions that occurred during the year of 2013)

DEPRECIABLE ASSETS
Personal Computer And Printer 
Cost: $1,600.00
Date Purchased: January 2, 2013
(Five-Year Property)

Computer Software
Cost: 250.00
Date Purchased: January 2, 2013
(Three-Year Property)

Furniture And Fixtures
Cost: 12,000.00 
Date Purchased: March 5, 2010
(Seven-Year Property)

(All of the above assets are used exclusively at Marge's Bookstore and were originally placed in service on the date purchased)

Marge elected to take the Section 179 Deduction for all assets acquired during the year of 2013. Assets acquired before 2013 are depreciated using the designated useful life and the Section 179 Deduction was not elected. (The First Year Additional Depreciation was not elected for any of these assets).

Marge also drove in 2013 her personal automobile, a 2012 Buick Park Avenue, which she acquired on April 28, 2012, a total of 6,000 miles (500 miles per month) for business purposes. Marge has always used the automobile in her business and drove the automobile a total of 15,000 miles for the entire year of 2013 including 5,200 of commuting miles (Beginning Mileage Reading was 35,000 miles and Ending Mileage Reading was 50,000 miles). Marge uses the Standard Mileage Method (Automatic Mileage Method) ($.565 per mile in 2013) to recover the cost of using her automobile for business purposes. In 2013, Marge also paid $200 for parking and toll fees while using the automobile for business purposes and paid a total of $400 of Interest on the loan for the automobile.

What would Schedule C look like for the above? (with explanation or depreciation wksht)

3. The Simpsons received Interest on Savings Accounts of $1,200 from Houston First National Bank and Interest of $520 from Harris County Bonds that they own. In addition, the Simpsons received Cash Dividends of $442 (all "Qualified Dividends") from Common Stock owned in Bush Corporation.

What would Schedule B look like for the above? (with explanation)