Transcript Mid-Term Test - SGM Capital LLC

Mid-Term Exam
PROBLEM 1
Thomas J. (born 5/26/1957) and Catalina I. Adran (born 6/7/1961)
are married and live at 22 Arcade Place, Richmond, VA 23240.
Tom is a computer programmer and Catalina is a school clerk.
They have three children - Peter, Marie, and Martin. Tom
and Catalina provided all of the support for their children.
Peter (SSN 091-46-5912, born 5/26/1986) is a full-time college
student and worked at a pet store part-time where he earned
$4,000. Marie (SSN 233-12-6464, born 2/10/1991) is a full-time
high school student and worked at a supermarket earning
$3,100. Peter and Marie had no other income. Martin (SSN 13144-2687, born 7/4/2000) had no income.
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The Adrans filed a joint return in 2007 and had itemized deductions of $11,000.
Their 2007 state income tax deduction was $2,990 and the sales tax deduction
they could have taken was $657. In 2008, the Adrans paid the following
expenses:
Dental bills
Real estate taxes
Medical bills
State balance due for 2006 return paid in 2008
Hearing aid (Marie)
Goodwill contribution (clothing FMV)
Toothpaste and other toiletries
Athletic club membership
Family health insurance
Church donations (no single amount over $250)
Prescription drugs
Personal property taxes
Back brace (Peter)
Neighborhood civic league
$ 415
$1,850
$ 825
$ 225
$ 225
$ 180
$ 115
$ 650
$1,550
$ 580
$ 195
$ 405
$ 185
$ 20
Prepare the Adran’s return for 2008.
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PROBLEM 2
Tracy B. Good (born 4/8/1970) pays all the costs of keeping up a home
located at 211 Laguna Lane, San Jose, CA 95113 for herself and her
daughter Ellen T. Good (SSN 399-88-7777, born 5/12/1992). Tracy and
her husband Rod were divorced in 2003 and Tracy signed an
agreement allowing Rod to claim the exemption for Ellen. Ellen
spends three months of the year with her father.
In March of 2008, Tracy’s nephew, Stanley Good (SSN 421-12-2121, born
12/7/1995), came to live with her. She provided all of his support.
Tracy is a clerk in a jewelry store. She also earns extra money as a
waitress. In 2008, Tracy reported tips to her employer as required. Her
tip record showed she also received $52 (not more than $19 in any
month) in tips she was not required to report to her employer.
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In 2008, Tracy received alimony payments of $300 per month from
Rod. Rod also pays Tracy $200 per month child support
payments for Ellen.
Tracy received a state refund of $250 on her 2007 state return. She
did not itemize deductions in 2007.
Prepare a 2008 tax return for Tracy.
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PROBLEM 3
Caroline F. (born 2/09/1958) and Roger A. Buckley (born
11/10/1957) are married and both work full time.
Caroline is an attorney and Roger is a bookkeeper.
Caroline’s father, Conrad Nagle (SSN 012-99-4523,
born 04/03/1934), lives with them and they provide
most of his support. Conrad’s only income in 2008
was $3,600 from a pension and $6,000 in social
security benefits.
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They have two children who lived with them all year and
they provide all of their support. Their son Albert (SSN
263-36-9090, born 12/10/1982) is severely disabled and
cannot work or care for himself. When Roger and
Caroline are at work, Albert receives care from Helping
Hands (EIN 34-3356793), 45 Larch St., Greensboro, NC
27401. In 2008, they paid $5,875 for Albert’s care. In 2008,
the Buckley’s also paid $2,890 for after school care for
their daughter Lily (SSN 263-19-4505, born 8/4/2003) so
they could work. Lilly stayed with a neighbor, Anne
Richards (SSN 346-82-4400), 1474 Parker Avenue,
Greensboro, NC 27401.
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Roger donated $200 per month to the United Way through a payroll
deduction plan.
Their itemized deductions for 2007 were $17,470 and they filed a joint
return. Their 2007 state income tax deduction was $6,190 and the sales
tax deduction they could have taken was $1,475.
In addition to the W-2 forms and 1099 forms provided, Roger also won the
Jackpot Lottery for $800. His lottery and bingo losses were $500.
Prepare the Buckley’s 2008 tax return.
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