Social Security

Social Security

This is the first part of a six-part problem that will allow you to prepare the 2016 tax return for Laurie and Lynn Norris. Each part of the problem will ask you to prepare a portion of their tax return. You should complete the appropriate portion of each form or schedule indicated in the instructions for each problem. The following basic information is provided for preparing their 2016 tax return: 1. Lynn and Laurie use the cash method of accounting and file their return on a calendar-year basis. unless otherwise stated, assume that the Norrises want to minimize the current year’s tax liability. 2. Lynn is 43 years old. Laurie is 38 years old.3. Lynn’s Social Security number is 482-22-2010 4. Laurie’s Social Security number is 490-32-8090 5. Josh’s Social Security number is 872-44-2929 6. Julie’s Social Security number is 798-88-3456
7. They do not have any foreign bank accounts. 8. Lynn and Laurie do not wish to contribute to the presidential election campaign. 9. Their home address is Santa Fe, Colorado (81252). Lynn and Laurie are married and have two children, Josh (15 years old) and Julie (19 years old). Laurie works for Fox Corporation as a drilling superintendent. Lynn runs an internet business, Handy Hints, from their home that provides handyman advice. Details on their income from these activities will be provided in Chapters 4 and 5. During 2016, they received the following interest and dividends:1.Second Bank savings account interest $ 2002.Marble School district bonds 1803.Saber Corporation bonds 1,9004.Hi-Flow Corporation dividends (qualifying) 450 In addition, they sold the following investments during the year: Security Sale Date Purchase Date Sales Price Commission Paid BasisDoonbeg Inc. 03/19/16 04/12/15 $ 8,000 $40 $8,980Troon Corporation 06/12/16 09/10/13 $11,000 $250 $7,850Augusta Motors 10/10/16 04/11/14 $ 6,000 $50 $6,870 The Form 1099 Lynn and Laurie received from their broker indicated total sales of $24,660 (i.e., sales were reported net of commissions). Required: Based on the information provided above, only fill out the appropriate portions of Form 1040, Form 1040 Schedule B, and Form 1040 Schedule D.

 

This is the fourth part of a six part problem that will allow you to prepare the 2016 tax return for Laurie and Lynn Norris. As with the previous parts, this part of the problem will ask you to prepare a portion of their tax return. You should complete the appropriate portion of each form or schedule indicated in the instructions. The following basic information is provided for preparing their 2016 tax return: Lynn Norris is the sole proprietor of an Internet business (Handy Hints) that provides handyman advice and tips for do-it-yourself home improvement projects. The site also serves as a portal for those looking for reputable contractors that provide a wide variety of home repair services. Lynn has also compiled his advice in an Ebook that is sold via his website. For the current year, he has the following revenue and expenses:
6-49
Revenue from advertising on his site Revenue from referrals Revenue from book sales Home improvement conference registrations Travel to conferences
Hotels Meals Accounting fees DSL Internet fees Legal fees One-time development costs with Ebook Office supplies Advertising on other sites
$45,000 27,450 8,700 4,500 1,250 420 190 1,200 1,850 625 6,800 240 4,000
• Both Laurie and Lynn contribute the maximum amount to their Individual Retirement Accounts.
• Lynn enrolled in an advanced Java course at the local community college. The tuition was $1,100. The software and textbook for the course cost was $225.
Required: Based on the information provided above, only fill out the appropriate portions of Form 1040, Form 1040 Schedule C, Form 1040 Schedule SE, Form 8917 and finish Form 8829. Lynn’s employer ID number is ***** and his principal business code is 541990.

 

 
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