Bob and Melissa Grants
Instructions:
Please complete the 2018 federal income tax return for Bob and Melissa Grant.Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040.If required information is missing, use reasonable assumptions to fill in the gaps.
Bob (age 43) and Melissa (age 43) Grant are married and live in Lexington, Kentucky.The Grants have two children Jared, age 15, and Alese, age 12.The Grants would like to file a joint tax return for the year.
The following information relates to the Grants’ tax year:
- Bob’s Social Security number is 474-45-1234, DOB: 8/15/1975
- Melissa’s Social Security number is 494-37-4893, DOB: 11/12/1975
- Jared’s Social Security number is 412-32-5690, DOB: 05/08/2003
- Alese’s Social Security number is 412-32-6940, DOB: 07/20/2006
- The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502.
- Jared and Alese are tax dependents for federal tax purposes
Bob Grant’s Forms W-2 provided the following wages and withholding for the year:
|
Employer |
Gross Wages |
Federal Income Tax Withholding |
State Income Tax Withholding |
|
National Storage |
$66,200 |
$8,000 |
$3,750 |
|
Lexington Little League |
$2,710 |
0 |
0 |
Melissa Grant’s Form W-2 provided the following wages and withholding for the year:
|
Employer |
Gross Wages |
Federal Income Tax Withholding |
State Income Tax Withholding |
|
Jensen Photography |
$24,500 |
$2,450 |
$1,225 |
All applicable and appropriate payroll taxes were withheld by the Grants’ respective employers.All the Grant family was covered by minimum essential health insurance during each month in 2018.The insurance was provided by Bob’s primary employer, National Storage.
The Grants also received the following during the year:
Interest income from First Kentucky Bank$130
Interest income from City of Lexington, KY Bond$450
Interest income from U.S. Treasury Bond$675
Interest income from Nevada State School Board Bond$150
Workers’ compensation payments to Bob$4,350
Disability payments received by Bob due to injury$3,500
- National Storage paid 100% of the premiums on the policy and included the premium payments in Bob’s taxable wages
- Medical Expenses for physical injuries$2,500
- Emotional Distress (from having been physically injured)$12,000
- Punitive Damages$10,000
Melissa received the following payments due to a lawsuit she filed for damages sustained in a car accident:
Total$24,500
Eight years ago, Melissa purchased an annuity contract for $88,000.She received her first annuity payment on January 1, 2018.The annuity will pay Melissa $15,000 per year for ten years (beginning with this year).The $15,000 payment was reported to Melissa on Form 1099-R for the current year (box 7 contained an entry of “7” on the form).
The Grants did not own, control or manage any foreign bank accounts nor were they grantors or beneficiaries of a foreign trust during the tax year.
The Grants paid or incurred the following expenses during the year:
Dentist/Orthodontist (unreimbursed by insurance)$10,500
Doctor fees (unreimbursed by insurance)$625
Prescriptions (unreimbursed by insurance)$380
KY state tax payment made on 4/15/18 for 2017 tax return liability$1,350
Real property taxes on residence$1,800
Vehicle registration fee based upon age of vehicle$250
Mortgage interest on principal residence$8,560
Interest paid on borrowed money to purchase the City of
Lexington, KY municipal bonds$400
Interest paid on borrowed money to purchase
U.S. Treasury bonds$240
Contribution to the Red Cross$1,000
Contribution to Senator Rick Hartley’s Re-election Campaign$2,500
Contribution to First Baptist Church of Kentucky $6,000
Fee paid to Jones & Company, CPAs for tax preparation$200
In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles commuting to work.The Grants have represented to you that they maintained careful logs to support their respective mileage.
The Grants drove 465 miles in total to receive medical treatment at a hospital in April.
The Grants’ personal residence was burglarized on October 1.The theft occurred during the day while both the Grants were at work and their children were at school.The Grants had the following personal-use property stolen:
|
Item |
Purchase Date |
Fair Value on Date of Theft |
Tax Basis of Item |
Insurance Reimbursement Received |
|
Laptop computer and Printer |
09/01/2017 |
3,000 |
3,000 |
500 |
|
Rifle |
03/01/2015 |
2,000 |
2,500 |
500 |
|
TV/Projector |
03/01/2015 |
5,000 |
13,000 |
1,000 |
|
2009 Honda Pilot |
07/01/2016 |
4,000 |
6,500 |
500 |
|
Total |
14,000 |
25,000 |
2,500 |
The Grants do not want to contribute to the Presidential Election Campaign Fund.The Grants would like to receive a refund (if any) of any tax they may have overpaid for the year.Their preferred method of receiving the refund is by check.
The Grants had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B.Basis information on each stock sale was reported to the IRS):
Sold 2,000 shares of Microsoft7/1/18$22,500
Sold 75 shares of Apple, Inc.4/15/18$28,750
Sold 350 shares of Cooper Tire10/14/18$14,700
Sold 1,000 shares of Cardinal Health9/3/18$35,000
Sold 50 shares of Union Pacific1/7/18$2,750
Purchased 100 shares of Procter & Gamble7/10/18$7,700
Purchased 350 shares of Cooper Tire11/1/18$14,000
Purchased 350 shares of PepsiCo5/14/18$32,000
Purchased 300 shares of Kellogg10/14/18$21,000
Relevant tax basis/holding period information related to sales of securities in the current year:
Purchased 2,000 shares of Microsoft on 5/1/18 for $21,000
Purchased 200 shares of Apple, Inc. on 3/8/15 for $90,000
Purchased 300 shares of Cooper Tire on 1/12/14 for $9,000
Purchased 50 shares of Cooper Tire on 6/28/18 for $2,000
Received 1,000 shares of Cardinal Health from Diana’s father as a gift on 10/10/01.Her father’s basis in the stock at the time of the gift was $7,000.Fair market value of the stock at the date of the gift was $41,000
Purchased 100 shares of Union Pacific on 9/5/17 for $6,000
The Grants have a $43,000 long-term capital loss carryover from the prior tax year.
extra:
Bank name: wells fargo
use USA 2018 taxes rules and changes.
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