Principles of Federal Income Tax

Acct 3315-003

Spring Semester 2019

Spencer W. Duck Tax Return Project

Due Date: Beginning of Class on Tuesday, February 7, 2019

Turn in the Grade Sheet with your name on it as a cover sheet.

This project is designed to help students become familiar with the process of

filing a personal income tax return with the IRS and some of the common tax

issues they are likely to face.

Forms for the project may be obtained at http://www.irs.gov. Forms and all

parts of the Form must be handwritten. Please do not turn in notebooks or

folders or other report covers. The attached Grade Sheet will serve as the

cover for the project.

Using the following information, prepare a 2014 Federal income tax return for

Spencer W. Duck. Include:

• Form 1040

• Schedule 1 (Form 1040)

• Schedule B (Form 1040)

• Schedule D (Form 1040)

• Form 8949

• Form 8814

• Tax Computation Worksheet (worksheet as to how tax was computed –

no special form required. This may be typed.)

• Notes to Tax Return (list any items in problem either not used or only

partially used with an explanation – no special form required. This may be

typed.)

Note: No other forms are to be turned in.

Note:

The forms and all parts of the forms are to be handwritten. Failure to

follow this requirement will result in a grade of zero for the project.

First Income Tax Return Project – Acct 3315 -003 (Spring Semester 2019) – P a g e | 2

Spencer W. Duck Income Tax Return Project

Acct 3315-003

Spring Semester 2019

Grade Sheet

Name: ____________________________________________

Section 50 Possible Points ___ Points

Form 1040 ____________

Schedule 1 (Form 1040) ____________

Schedule B (Form 1040) ____________

Schedule D (Form 1040) ____________

Form 8814 ____________

Form 8949 ____________

Tax Computation Worksheet ____________

Notes to Tax Return ____________

Total ____________

By completing and turning in this assignment, you are agreeing to the UTA Honor

Code:

I pledge, on my honor, to uphold UT Arlington’s tradition of academic integrity, a

tradition that values hard work and honest effort in the pursuit of academic

excellence. I promise that I will submit only work that I personally create or

contribute to group collaborations, and I will appropriately reference any work

from other sources. I will follow the highest standards of integrity and uphold the

spirit of the Honor Code.

First Income Tax Return Project – Acct 3315 -003 (Spring Semester 2019) – P a g e | 3

Spencer W. Duck

2018 U.S. Individual Tax Return (Form 1040)

Spencer W. Duck is single and lives at 321 Hickory Drive in Ames, Iowa 86701.

His eight-year-old son, Mitch, lives with him nine months of the year in Spencer’s

rented condominium. Mitch lives with his mother, Daisy – Spencer’s ex-wife,

during the summer months. His mother provides half of Mitch’s support and

Spencer has agreed to allow her to claim Mitch as her dependent.

Spencer has the following items pertaining to his 2018 Federal income tax return:

• Spencer is age 35 (SSN: 333-22-1111). Mitch is age 8. (SSN: 111-23-

4567). Other than Mitch, Spencer has no children.

• As an information technology specialist, Spencer receives a $164,800

salary from his employer (World Electronics, LLC), who withheld $33,300

in federal income tax.

• He paid $25,000 in alimony to his ex-wife (Daisy, SSN: 222-44-5555).

Mitch was divorced in 2015. His divorce decree was finalized in 2016 and

requires him to pay alimony.

• He received a state income tax refund in 2018 of $3,500 for state income

taxes withheld in 2017. Last year (2017), he used the standard deduction

when completing his 2017 Federal income tax return.

• In 2018, he had state income tax withheld from his wages of $5,500.

• Other items:

o Alcon Corporation bond interest income $7,600

o City of Drake bond interest income $7,000

o Pear Corporation Dividend (qualified) $4,500

o South Lake Mutual Fund

▪ Capital Gain Distribution $700

▪ Ordinary Dividend (qualified) $950

• Gambling winnings from playing the slot machines: $15,000. Gambling

losses – $2,000. Spencer’s nickname is “The Lucky Duck.”

• Spencer had the following capital asset transactions in 2018:

o On March 1, 2018, land was sold for $36,000. The land was

received as a property settlement on January 10, 2015, when the

land’s FMV was $32,000. His ex-wife’s basis for the land,

purchased on January 10, 2000, was $28,500.

o A personal-use computer acquired on March 2, 2017 for $4,000

was sold for $1,580 on July 10, 2018.

o A membership card for a prestigious Ames City country club was

sold for $10,500 on August 15, 2018. The card was acquired on

October 10, 2013, for $6,000.

o On August 16, 2018, Spencer sold for $3,700 his 10 shares of York

Corporation purchased as an investment on February 16, 2018 for

$2,600. (No code for Form 8949 is applicable).

First Income Tax Return Project – Acct 3315 -003 (Spring Semester 2019) – P a g e | 4

o On March 15, 2018, he sells for $6,500 an antique watch fob. The

fob was a gift from his grandfather on January 10, 1998, when its

FMV was $1,000. The fob was purchased by his grandfather on

April 2, 1979 for $1,500.

o 10 shares of Texsun Industries, Inc. stock held as an investment

were sold for $26,000 on December 5, 2018. The securities were

inherited from his uncle, who died on April 10, 2014 when the fair

market value of the securities was $19,000. The uncle purchased

the securities on January 10, 2012, for $15,700. (No code for Form

8949 is applicable).

o He has a short-term capital loss carryover of $650 from last year.

• Mitch has interest income of $950 from a Bank of Ames certificate of

deposit which his mother put in his name. Neither Spencer, Daisy nor

Mitch want Mitch to file a separate tax return and elect to include the

interest income on the appropriate parent’s tax return.

• Other than those items listed above, Spencer had no other itemized

deductions. Spencer also has no foreign bank accounts nor other foreign

assets or financial interests.

Complete Form 1040 and accompanying schedules for Spencer W. Duck’s

Federal income tax return for the 2018 tax year. Use all rates and deductions,

that are applicable for 2018. Ignore the additional credit for child and dependent

care expenses and the alternative minimum tax. Ignore any penalties, but

consider any applicable credits.

In filling out Form 8949, all transactions will have box (C) or (F) checked. There

is no need to fill-out more than one Form 8949.

The return should contain all information needed so that Spencer should

be able to immediately sign the return and send it to the IRS when you

present it to him.

• Attachment 1
• Attachment 2
• Attachment 3
• Attachment 4

Bb Syllabus – 2192-ACCT-3315-003- XACCT 3309X* Homework Help – Q&A from Onl x+X< -> C @ https://elearn.uta.edu/bbcswebdav/pid-8042486-dt-content-rid-137905887_1/users/jsrepsis/Acct%203315%20Spring%202019/Additional%20Materials/Acct%203315-003%…QJACCT 33091/ 4CPrinciples of Federal Income TaxAcct 3315-003Spring Semester 2019Spencer W. Duck Tax Return ProjectDue Date: Beginning of Class on Tuesday, February 7, 2019Turn in the Grade Sheet with your name on it as a cover sheet.This project is designed to help students become familiar with the process offiling a personal income tax return with the IRS and some of the common taxissues they are likely to face.Forms for the project may be obtained at http://www.irs.gov. Forms and allparts of the Form must be handwritten. Please do not turn in notebooks orfolders or other report covers_The attached Grade Sheet will serve as thecover for the project.Using the following information, prepare a 2014 Federal income tax return forSpencer W. Duck. Include:Form 1040Schedule 1 (Form 1040)Schedule B (Form 1040)Schedule D (Form 1040)Form 8949Form 8814Tax Computation Worksheet (worksheet as to how tax was computed -no special form required. This may be typed.)Notes to Tax Retum (list any items in problem either not used or onlypartially used with an explanation – no special form required. This may betyped.)Note: No other forms are to be turned in.+Note:The forms and all parts of the forms are to be handwritten. Failure tofollow this requirement will result in a grade of zero for the project.O Type here to search0Eia9Ax12:32 PMIIm2/5/2019