Tax Return Project
Required:
Use the following information to complete Paul and Judy Vances 2011 federal
income tax return. If information is missing, use reasonable assumptions to fill
in the gaps. You may need the following forms and schedules to complete the project:
Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E,
Schedule SE, Form 2106-EZ, Form 4562 (for the dental practice), Form 4562
(for the rental property), Form 4797, and Form 8863. The forms, schedules,
and instructions can be found at the IRS Web site (www.irs.gov). The
instructions can be helpful in completing the forms.
Facts:
1. Paul J. and Judy L. Vance are married and file a joint return. Paul is self-employed
as a dentist, and Judy is a college professor. Paul and Judy have
three children. The oldest is Vince who lives at home. Vince is a law student
at the University of Cincinnati and worked part-time during the year, earning
$1,500, which he spent for his own support. Paul and Judy provided $6,000
toward Vinces support (including $4,000 for Vinces fall tuition). They also
provided over half the support of their daughter, Joan, who is a full-time
student at Edgecliff College in Cincinnati. Joan worked part-time as an independent
contractor during the year, earning $3,200. Joan lived at home until
she was married in December 2011. She filed a joint return with her husband,
Patrick, who earned $20,000 during the year. Jennifer is the youngest and
lived in the Vances home for the entire year. The Vances provide you with the
following additional information:
Paul and Judy would like to take advantage on their return of any
educational expenses paid for their children.
The Vances do not want to contribute to the presidential election
campaign.
The Vances live at 621 Franklin Avenue, Cincinnati, OH 45211.
Pauls birthday is 3/5/1957 and his Social Security number is 333-45-6666.
Judys birthday is 4/24/1960 and her Social Security number is 566-77-8888.
Vinces birthday is 11/6/1988 and his Social Security number is
576-18-7928.
Joans birthday is 2/1/1992 and her Social Security number is 575-92-4321.
Jennifers birthday is 12/12/1999 and her Social Security number is
613-97-8465.
The Vances do not have any foreign bank accounts or trusts.
2. Judy is a lecturer at Xavier University in Cincinnati, where she earned $30,000.
The university withheld federal income tax of $3,375, state income tax of
$900, Cincinnati city income tax of $375, $1,260 of Social Security tax and
$435 of Medicare tax. She also worked part of the year for Delta Airlines.
Delta paid her $10,000 in salary, and withheld federal income tax of $1,125,
state income tax of $300, Cincinnati city income tax of $125, Social Security
tax of $420 and Medicare tax of $145.
3. The Vances received $800 of interest from State Savings Bank on a joint
account. They received interest of $1,000 on City of Cincinnati bonds they
bought in January with the proceeds of a loan from Third National Bank of
Cincinnati. They paid interest of $1,100 on the loan. Paul received a dividend
of $540 on General Bicycle Corporation stock he owns. Judy received a dividend
of $390 on Acme Clothing Corporation stock she owns. Paul and Judy
received a dividend of $865 on jointly owned stock in Maple Company. All of
the dividends received in 2011 are qualified dividends.
4. Paul practices under the name Paul J. Vance, DDS. His business is located at
645 West Avenue, Cincinnati, OH 45211, and his employer identification number
is 01-2222222. Pauls gross receipts during the year were $111,000. Paul uses
the cash method of accounting for his business. Pauls business expenses are as
follows:

Advertising
Professional dues
Professional journals
Contributions to employee benefit plans
Malpractice insurance
Fine for overbilling State of Ohio for work
performed on welfare patient
Insurance on office contents
Interest on money borrowed to refurbish office
Accounting services
Miscellaneous office expense
Office rent
Dental supplies
Utilities and telephone
Wages
Payroll taxes

$ 1,200
490
360
2,000
3,200
5,000
720
600
2,100
388
12,000
7,672
3,360
30,000
2,400

In June, Paul decided to refurbish his office. This project was completed and the
assets placed in service on July 1. Pauls expenditures included $8,000 for new
office furniture, $6,000 for new dental equipment (seven-year recovery period),
and $2,000 for a new computer. Paul elected to compute his cost recovery
allowance using MACRS. He did not elect to use 179 immediate expensing,
and he chose to not claim any bonus depreciation.
5. Judys mother, Sarah, died on July 2, 2006, leaving Judy her entire estate.
Included in the estate was Sarahs residence (325 Oak Street, Cincinnati, OH
45211). Sarahs basis in the residence was $30,000. The fair market value of the
residence on July 2, 2006, was $155,000. The property was distributed to Judy
on January 1, 2007. The Vances have held the property as rental property and
have managed it themselves. From 2007, until June 30, 2011, they rented the
house to the same tenant. The tenant was transferred to a branch office in
California and moved out at the end of June. Since they did not want to bother
finding a new tenant, Paul and Judy sold the house on June 30, 2011. They
received $140,000 for the house and land ($15,000 for the land and $125,000 for
the house), less a 6 percent commission charged by the broker. They had
depreciated the house using the MACRS rules and conventions applicable to
residential real estate. To compute depreciation on the house, the Vances had
allocated $15,000 of the propertys basis to the land on which the house is
located. The Vances collected rent of $1,000 a month during the six months
the house was occupied during the year. They incurred the following related
expenses during this period:
Property insurance
Property taxes
Maintenance
Depreciation (to be computed)

$500
800
465
?

6. The Vances sold 200 shares of Capp Corporation stock on September 3,
2011, for $42 a share (minus a $50 commission). The Vances received the
stock from Pauls father on June 25, 1980, as a wedding present. Pauls
father originally purchased the stock for $10 per share in 1967. The stock
was valued at $14.50 per share on the date of the gift. No gift tax was paid
on the gift.
7. Judy is required by Xavier University to visit several high schools in the Cincinnati
area to evaluate Xavier University students who are doing their practice teaching.
However, she is not reimbursed for the expenses she incurs in doing this. During
the spring semester (January through April 2011), she drove her personal automobile
6,800 miles in fulfilling this obligation. Judy drove an additional 6,700 personal
miles during 2011. She has been using the car since June 30, 2010. Judy uses
the standard mileage method to calculate her car expenses.
8. Paul and Judy have given you a file containing the following receipts for expenditures
during the year:

Prescription medicine and drugs (net of insurance reimbursement)
Doctor and hospital bills (net of insurance reimbursement)
Penalty for underpayment of last years state income tax
Real estate taxes on personal residence
Interest on home mortgage (paid to Home State Savings & Loan)
Interest on credit cards (consumer purchases)
Cash contribution to St. Matthews church
Payroll deductions for Judys contributions to the United Way
Professional dues (Judy)
Professional subscriptions (Judy)
Fee for preparation of 2010 tax return paid April 14, 2011

$

376
2,468
15
4,762
8,250
595
3,080
150
325
245
500

9. The Vances filed their 2010 federal, state, and local returns on April 14, 2011.
They paid the following additional 2010 taxes with their returns: federal income
taxes of $630, state income taxes of $250, and city income taxes of $75.
10. The Vances made timely estimated federal income tax payments of $1,500 each
quarter during 2011. They also made estimated state income tax payments of
$300 each quarter and estimated city income tax payments of $160 each quarter.
The Vances made all fourth-quarter payments on December 31, 2011. They would
like to receive a refund for any overpayments.Click here to have a similar paper done for you by one of our writers within the set deadline at a discounted

Tax Return Project
Required:
Use the following information to complete Paul and Judy Vances 2011 federal
income tax return. If information is missing, use reasonable assumptions to fill
in the gaps. You may need the following forms and schedules to complete the project:
Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E,
Schedule SE, Form 2106-EZ, Form 4562 (for the dental practice), Form 4562
(for the rental property), Form 4797, and Form 8863. The forms, schedules,
and instructions can be found at the IRS Web site (www.irs.gov). The
instructions can be helpful in completing the forms.
Facts:
1. Paul J. and Judy L. Vance are married and file a joint return. Paul is self-employed
as a dentist, and Judy is a college professor. Paul and Judy have
three children. The oldest is Vince who lives at home. Vince is a law student
at the University of Cincinnati and worked part-time during the year, earning
$1,500, which he spent for his own support. Paul and Judy provided $6,000
toward Vinces support (including $4,000 for Vinces fall tuition). They also
provided over half the support of their daughter, Joan, who is a full-time
student at Edgecliff College in Cincinnati. Joan worked part-time as an independent
contractor during the year, earning $3,200. Joan lived at home until
she was married in December 2011. She filed a joint return with her husband,
Patrick, who earned $20,000 during the year. Jennifer is the youngest and
lived in the Vances home for the entire year. The Vances provide you with the
following additional information:
Paul and Judy would like to take advantage on their return of any
educational expenses paid for their children.
The Vances do not want to contribute to the presidential election
campaign.
The Vances live at 621 Franklin Avenue, Cincinnati, OH 45211.
Pauls birthday is 3/5/1957 and his Social Security number is 333-45-6666.
Judys birthday is 4/24/1960 and her Social Security number is 566-77-8888.
Vinces birthday is 11/6/1988 and his Social Security number is
576-18-7928.
Joans birthday is 2/1/1992 and her Social Security number is 575-92-4321.
Jennifers birthday is 12/12/1999 and her Social Security number is
613-97-8465.
The Vances do not have any foreign bank accounts or trusts.
2. Judy is a lecturer at Xavier University in Cincinnati, where she earned $30,000.
The university withheld federal income tax of $3,375, state income tax of
$900, Cincinnati city income tax of $375, $1,260 of Social Security tax and
$435 of Medicare tax. She also worked part of the year for Delta Airlines.
Delta paid her $10,000 in salary, and withheld federal income tax of $1,125,
state income tax of $300, Cincinnati city income tax of $125, Social Security
tax of $420 and Medicare tax of $145.
3. The Vances received $800 of interest from State Savings Bank on a joint
account. They received interest of $1,000 on City of Cincinnati bonds they
bought in January with the proceeds of a loan from Third National Bank of
Cincinnati. They paid interest of $1,100 on the loan. Paul received a dividend
of $540 on General Bicycle Corporation stock he owns. Judy received a dividend
of $390 on Acme Clothing Corporation stock she owns. Paul and Judy
received a dividend of $865 on jointly owned stock in Maple Company. All of
the dividends received in 2011 are qualified dividends.
4. Paul practices under the name Paul J. Vance, DDS. His business is located at
645 West Avenue, Cincinnati, OH 45211, and his employer identification number
is 01-2222222. Pauls gross receipts during the year were $111,000. Paul uses
the cash method of accounting for his business. Pauls business expenses are as
follows:

Advertising
Professional dues
Professional journals
Contributions to employee benefit plans
Malpractice insurance
Fine for overbilling State of Ohio for work
performed on welfare patient
Insurance on office contents
Interest on money borrowed to refurbish office
Accounting services
Miscellaneous office expense
Office rent
Dental supplies
Utilities and telephone
Wages
Payroll taxes

$ 1,200
490
360
2,000
3,200
5,000
720
600
2,100
388
12,000
7,672
3,360
30,000
2,400

In June, Paul decided to refurbish his office. This project was completed and the
assets placed in service on July 1. Pauls expenditures included $8,000 for new
office furniture, $6,000 for new dental equipment (seven-year recovery period),
and $2,000 for a new computer. Paul elected to compute his cost recovery
allowance using MACRS. He did not elect to use 179 immediate expensing,
and he chose to not claim any bonus depreciation.
5. Judys mother, Sarah, died on July 2, 2006, leaving Judy her entire estate.
Included in the estate was Sarahs residence (325 Oak Street, Cincinnati, OH
45211). Sarahs basis in the residence was $30,000. The fair market value of the
residence on July 2, 2006, was $155,000. The property was distributed to Judy
on January 1, 2007. The Vances have held the property as rental property and
have managed it themselves. From 2007, until June 30, 2011, they rented the
house to the same tenant. The tenant was transferred to a branch office in
California and moved out at the end of June. Since they did not want to bother
finding a new tenant, Paul and Judy sold the house on June 30, 2011. They
received $140,000 for the house and land ($15,000 for the land and $125,000 for
the house), less a 6 percent commission charged by the broker. They had
depreciated the house using the MACRS rules and conventions applicable to
residential real estate. To compute depreciation on the house, the Vances had
allocated $15,000 of the propertys basis to the land on which the house is
located. The Vances collected rent of $1,000 a month during the six months
the house was occupied during the year. They incurred the following related
expenses during this period:
Property insurance
Property taxes
Maintenance
Depreciation (to be computed)

$500
800
465
?

6. The Vances sold 200 shares of Capp Corporation stock on September 3,
2011, for $42 a share (minus a $50 commission). The Vances received the
stock from Pauls father on June 25, 1980, as a wedding present. Pauls
father originally purchased the stock for $10 per share in 1967. The stock
was valued at $14.50 per share on the date of the gift. No gift tax was paid
on the gift.
7. Judy is required by Xavier University to visit several high schools in the Cincinnati
area to evaluate Xavier University students who are doing their practice teaching.
However, she is not reimbursed for the expenses she incurs in doing this. During
the spring semester (January through April 2011), she drove her personal automobile
6,800 miles in fulfilling this obligation. Judy drove an additional 6,700 personal
miles during 2011. She has been using the car since June 30, 2010. Judy uses
the standard mileage method to calculate her car expenses.
8. Paul and Judy have given you a file containing the following receipts for expenditures
during the year:

Prescription medicine and drugs (net of insurance reimbursement)
Doctor and hospital bills (net of insurance reimbursement)
Penalty for underpayment of last years state income tax
Real estate taxes on personal residence
Interest on home mortgage (paid to Home State Savings & Loan)
Interest on credit cards (consumer purchases)
Cash contribution to St. Matthews church
Payroll deductions for Judys contributions to the United Way
Professional dues (Judy)
Professional subscriptions (Judy)
Fee for preparation of 2010 tax return paid April 14, 2011

$

376
2,468
15
4,762
8,250
595
3,080
150
325
245
500

9. The Vances filed their 2010 federal, state, and local returns on April 14, 2011.
They paid the following additional 2010 taxes with their returns: federal income
taxes of $630, state income taxes of $250, and city income taxes of $75.
10. The Vances made timely estimated federal income tax payments of $1,500 each
quarter during 2011. They also made estimated state income tax payments of
$300 each quarter and estimated city income tax payments of $160 each quarter.
The Vances made all fourth-quarter payments on December 31, 2011. They would
like to receive a refund for any overpayments.Click here to have a similar paper done for you by one of our writers within the set deadline at a discounted