Question

Read the case on which your Portfolio Project is based. Determine all items that will be deducted before the AGI calculation. In a MS Excel spreadsheet, list all deductible items in column A. In column B, determine where that deduction should appear on Form 1040 (for tax year 2017). Review the Portfolio Project Milestone Rubric in the Module 4 Materials folder to understand how you will be graded on the project. You must address instructor feedback when submitting your complete Portfolio Project during week 8. The deliverables are as follows: The MS Excel spreadsheet that lists the deduction for AGI (dfor) items and the supporting information on which your decision is based. ACT405 – Portfolio Project Case 1 Comprehensive Tax Problem – Option 1 Taxpayer Information Name: John Washington Address: 3450 Green St. Miami, FL 54321 DOB: 5/5/1960 Filing Status: Married SSN: 434-20-2020 Occupation: Engineer Name: Debra Washington Address: 3450 Green St. Miami, FL 54321 DOB: 7/7/1962 Filing Status: Married SSN: 411-21-4568 Occupation: Teacher INCOME INFORMATION: Wages and Compensation The following information is taken from John Washington’s 2017 Form W-2 Wage and Tax Statement: Box 1 – Wages, tips, and other compensation 80,000 Box 2 – Federal Withholding 12,500 Box 17 – State Income Tax Withholding 2,000 The following information is taken from Debra Washington’s 2017 Form W-2 Wage and Tax Statement: Box 1 – Wages, tips, and other compensation 42,000 Box 2 – Federal Withholding 3,500 Box 17 – State Income Tax Withholding 750 Interest and Dividends John had interest income from a savings account from Everest Bank of $500.00 Debra had dividend income of $550 from Blue Co. stock. Capital Gains John had the following stock transactions in 2017: He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2017, which he purchased on April 1, 2017 for 25,000 Rental Real Estate The couple owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit are as follows: Rental income $12,000 Property taxes $1,500 Depreciation $1,000 Repairs and Maintenance $750 Insurance $2,000 Other Transactions in 2017 1. Debra had educator expenses in 2017 of $450.00 2. John had gambling winnings of $1,000. 3. John was the beneficiary of his mother’s life insurance policy. His mother died in 2017 and he received $50,000 under this policy. 4. Debra paid $700 in student loan interest.

Answer 1

GIVEN DATA:

John Washington’s 2017 Following information:

wages , tips , & other compensation = 80000

Federal Withholding = 12,500

State Income Tax Withholding = 2000

Debra Washington’s 2017  Following information:

Wages, tips, and other compensation = 42000

Federal Withholding = 3500

State Income Tax Withholding = 750

Dividend income = 550

Rental = 12,000

Property taxes =   1,500

Depreciation =   1,000

Repairs and Maintenance = 750

Insurance = 2000

Educator expenses = 450.00

Gambling winnings = 1000

life insurance policy = 50000

SOLUTION :