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Tax FormResolved Question:Instructions:Please complete the required federal individual income tax return forms for the following taxpayers. Unless instructed otherwise the information provided is for the taxpayers 2012 tax year. Please complete their 2012 tax return. 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.Joseph and Diana Cohen live in Pleasantville New Jersey. Joseph is the Vice President of Sales at a small start-up company. Diana is a former advertising executive who currently consults with former clients. She also serves on the Board of Directors of an advertising company. The Cohens have three children: Rebecca (18) Alan (15) and David (12). During the year Rebecca left home to attend a liberal arts college. The Cohens plan to file a joint tax return. The Cohens provided the following information: Joseph s Social Security number isNNN-NN-NNNN/p>Diana s Social Security number isNNN-NN-NNNN/li>Rebecca s Social Security number isNNN-NN-NNNN/li>Alan s Social Security number isNNN-NN-NNNN/li>David s Social Security number isNNN-NN-NNNN/li>The Cohen s mailing address is 85 North Maple Drive Pleasantville New Jersey 08233Rebecca Alan and David are tax dependents for federal tax purposesJoseph Cohen reported the following the following information relating to his employment during the year:CompanyGross WagesFederal Income Tax WithholdingState Income Tax WithholdingAlternative Energy$115325$28230$13400The above amounts do not reflect any income items described below. . Joseph s employer withheld all applicable and appropriate payroll taxes on all income for which it was required to withhold.Diana Cohen received the following revenue during the year (she uses the cash method of accounting).Consulting revenue reported to her on a form 1099-MISC Box 7High-end Retail $32000Jensen s Health Products $8500Strategic Solutions $3750Board of Directors fees reported to her on a form 1099-MISC Box 7Natural Sunshine Inc. $6500During the year Diana paid the following business expenses:Consultant-relatedAirfare $2900Hotel $1450Meals $390Parking $320She drove 290 business miles for her consulting related activities (she has documentation to verify)Board of Director-related-Meals $125Hotel $225She drove 315 business miles for her Board of Director activities (she has documentation to verify)Neither business required the filing of forms 1099 to report payments made during the tax year. In addition Ms. Cohen drove a 2010 Lexus purchased on January 1 2010 for all of her business mileage. She drove the vehicle a total of 10605 miles during the year for all purposes. She has written documentation to support the mileage amounts. She also has access to another vehicle for personal purposes.The Cohens also received the following during the year:Interest income from First Bank of New Jersey $320Interest income from Patterson New Jersey School District $200Interest income from U.S. Treasury Bond $350Interest income from General Mills corporate bond $400Qualified dividend income from Rio Tinto $1500Qualified dividend income from Microsoft $750Qualified dividend income from Cooper Tire $200Qualified dividend income from Cardinal Health $425Qualified dividend income from Union Pacific $140Qualified dividend income from Procter & Gamble $190Qualified dividend income from PepsiCo $225Qualified dividend income from Kellogg $200Qualified dividend income from Abbott Labs $275Qualified dividend income from 3M $350Dividend income (not qualified) from China Fund $2000The Cohens did not own control or manage any foreign bank accounts nor were they a grantor or beneficiary of a foreign trust during the tax year.The Cohens had the following activity in their brokerage account during the year. All transactions were reported on a form 1099-B with Box A checked:Sold 2000 shares of Microsoft 7/1/CY (current year) $22500Sold 75 shares of Apple 4/15/CY $28750Sold 350 shares of Cooper Tire 10/14/CY $14700Sold 1000 shares of Cardinal Health 9/3/CY $35000Sold 50 shares of Union Pacific 1/7/CY $2750Purchased 100 shares of Procter & Gamble 7/10/CY $7700Purchased 75 shares of Apple 4/18/CY $29000Purchased 350 shares of Cooper Tire 11/1/CY $14000Purchased 350 shares of PepsiCo 5/14/CY $32000Purchased 300 shares of Kellogg 10/14/CY $21000Relevant tax basis/holding period information related to sales of securities in the current year:Purchased 2000 shares of Microsoft on 5/1/CY for $21000Purchased 200 shares of Apple on 3/8/2010 for $90000Purchased 300 shares of Cooper Tire on 1/12/2009 for $9000Purchased 50 shares of Cooper Tire on 6/28/CY for $2000Received 1000 shares of Cardinal Health from Diana s father as a gift on 10/10/96. Donor s basis was $7000. FMV at the date of the gift was $41000Purchased 100 shares of Union Pacific on 9/5/PY (prior year) for $6000The Cohens have a $43000 long-term capital loss carry forward from their prior tax year.The Cohens received a New Jersey state tax refund of $400 in the current year relating to their prior year New Jersey Individual Income Tax return filed in April of the current year. The Cohens did not pay the alternative minimum tax in the prior year and they received full benefit for all of the state tax income taxes they paid and deducted in the prior year.Diana is a 10% owner in an advertising agency Bright Ideas ( BI ) (EIN 20-1234567). BI is a Subchapter S corporation. The company reported ordinary business income for the 2013 year of $150000. Sarah acquired the stock several years ago. Her basis in the stock before considering her income allocation was $92000. Sarah is a passive owner with respect to this entity.Diana is a 20% owner in Natural Sunshine Inc. ( NS ) (EIN 24-9876543). NS is a Subchapter S corporation. The company reported an ordinary business loss for the year of ($80000). Sarah acquired the stock several years ago. Her basis in the stock before considering her loss allocation was $45000. Sarah is a passive owner with respect to this entity.Joseph received 5000 shares of restricted (common) stock from his employer on July 1 of the current year. The terms of the restricted stock grant are such that if Joseph is still employed by Alternative Energy on July 1 in five years the entire 5000 shares will vest and become his property. Joseph upon the advice of his tax advisor prepared and filed an IRC Section 83(b) election on July 8 of the current year. The value of the shares on July 1 was $5 per share. Joseph estimates the value of the shares in five years will be at least $150 per share. Joseph notified Alternative Energy about the IRC Sec. 83(b) in a timely manner. None of the income tax consequences of this restricted stock grant were reported in the $115325 reported as part of his gross wages above.In May Joseph was injured at home in an accident. The accident restricted Joseph from working for about a month. During this time Joseph received $15000 in disability payments attributable to a disability insurance policy. The disability policy premiums were paid on Joseph s behalf as a nontaxable fringe benefit.The Cohens paid the following expenses during the year:Dentist (unreimbursed by insurance) $1500Doctors (unreimbursed by insurance) $ 2425Prescriptions (unreimbursed by insurance) $ 675Real property taxes on residence $7525Vehicle property tax based upon value $1250Mortgage interest on principal residence $12550Margin interest paid to broker $600Contribution to United Way $2000Contribution to American Cancer Society $5000Contribution to neighborhood drive to oppose development project $500Contribution to the Temple Mount Synagogue $12000Fee paid to Mouser Johnson and Hintze CPAs for tax preparation $450The Cohens also donated clothing electronics furniture and other household goods to the Salvation Army of Pleasantville New Jersey on April 15. Estimated thrift value of the goods donated is $275.Miscellaneous InformationOn September 1 the Cohens paid $200 in foreign taxes attributable to the dividend received from the China Fund.During the year the Cohens paid for Rebecca s tuition payments to attend The College of Liberal Arts of New Jersey (CLA). Rebecca attended the spring/summer and the fall semesters as a full-time student. Total amount paid by the Cohens during the year for tuition was $9000 and $2000 for books. Rebecca also used $6000 from a scholarship received from CLA to pay the rest of the tuition. Rebecca was not required to perform any services as a condition of accepting the scholarship. Rebecca was not employed during the year. CLA s address and employer identification number (EIN) is as follows:The College of Liberal Arts of New Jersey65 Ivory TowerPenns Grove NJ 08069EIN- 22-5698324The Cohens would like to contribute to the Presidential Election Campaign. The Cohens would also 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

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