ACC-460 – Federal Taxation

ACC-460 – Federal Taxation

Instructions: Topic 8 Tax Return Problem

You will be working individually to complete an s-corporation tax return and an individual income tax return. The completed tax returns can be submitted in paper copy during class (if uploaded to LoudCloud – please scan and upload one single document. Note if you upload multiple documents, the assignment will not be graded, and you will be required to turn in a paper copy or resubmit a single document with possible late point deductions). Use 2018 forms only (points will be deducted for using 2017 or 2019 forms).

Required

Prepare an s-corporation tax return. See data below. You will need the following forms:

• Form 1120S and corresponding schedules, including Schedules L and M-1
• Schedule K-1 for Herman Hiebert (from problem C11-64)
• For the Schedule K-1, use the address and SSN information below for Herman.

Individual taxpayer information

Individual tax forms required:

• Form 1040
• Schedule 1
• Schedule 5
• Schedule A
• Schedule B
• Schedule D
• Schedule E
• Form 8949
• Form 4797 (see item 4.i. below)

1. Herman Hiebert’s social security number is 456-12-3789. He is married but does not have any dependents. His wife’s name is Rebecca, and her social security number is 123-45-6789. They live at 1345 E. 44^th Street, Phoenix, AZ 85017

2. Additional information to complete the tax returns:

1. Rebecca works at Intel Corporation and earned $160,000 during the tax year.
2. Her federal tax withholding was $30,000 and Arizona income taxes withheld were $8,000. Herman made federal estimated tax payments of $15,000 and Arizona estimated payments of $1,500
3. Mortgage interest on their personal residence was $15,200, and property taxes were $5,150.
4. Additional charitable contributions of $10,500 were paid during the year.
5. On July 10, 2018, they sold 1,000 shares of Intel Corporation stock for $70 per share. They purchased the stock on May 1, 2012 for $56 per share.
6. The taxpayer’s have a long-term capital loss carry forward of $5,000.
7. Assume AMT does not apply.
8. Apply any refund to estimated tax payments for the next year.
9. Instead of preparing Form 4797 (because it was already prepared for the s-corporation), input any gain/loss from the Section 1231 asset on Form 1040, Schedule 1, line 14.

3. Download the appropriate 2018 tax forms from the IRS website. Include any necessary supporting schedules and supporting documentation. Use 2018 tax forms only (points will be deducted for using incorrect forms).

4. If submitting to LoudCloud, create one PDF file with all the tax forms in the order they should appear in a submitted tax return. If submitting paper copy, remember to put the forms in the proper order. Points will be deducted if forms are placed out of order. Remember to include the appropriate taxpayer information on the forms; points will be deducted for missing items.