Janice Morgan, age 24, is single and has no dependents. Janice works as an employee from Worldwide Publishing and also as a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her freelance writing business Writers Anonymous (self employed). Both Writers Anonymous and Janice operate on the cash basis. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6789. Self Employed Information: Income from sale of articles 75,000 Rent 13,500 Utilities 7,900 Supplies 1,800 Insurance (business liability) 5,000 Travel (assume fully deductible) 2,300 Meals (while on business travel) 600 Meals (while meeting with clients) 600 Country Club (Used to entertain clients) 4,000 Client entertainment expenses 1,000 Personal items: Wages from Worldwide Publishing $110,000 Interest from checking account from First Bank 4,000 Home mortgage interest paid to First Bank 10,000 (Secured by principal residence, acquisition debt) Home Equity Line of Credit 3,000 (Secured by principal residence, used to pay off credit cards) Property taxes on personal residence 4,000 Charitable contributions 10,700 Federal income tax withholding 26,000 State income tax withheld 8,500 During the year, Janice invested $10,000 (tax basis and at-risk basis) into XYZ limited partnership (a passive investment). Her share of the limited partnership income for the year was $6,000, and Janice received a $5,000 distribution from XYZ limited partnership. During the year, Janice also invested $6,000 (tax basis and at-risk basis) into ABC limited partnership (a passive investment). Her share of the limited partnership loss for the year was $7,000, and Janice received a $1,500 distribution from ABC limited partnership. In 2012 Janice started DEF Corporation (a small private C corporation) by contributing $40,000. She was the only owner. During the year Janice sold her complete investment for $30,000. Additionally, Janice had: (1)Janice made a $6,000 contribution to her traditional IRA account. Her employer, Worldwide publishing, offers a 401k that Janice contributes to. (2)Sale of LMN publically traded stock on 8/15/2019 for $11,000 (originally purchased for $4,000 on 1/15/2015) (3)Sale of QRS publically traded stock on 10/15/2019 for $2,000 (originally purchased for $6,000 on 12/15/2018) (4)Sale of a boat on 5/15/2019 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2014) (5)Janice inherited publically traded stock worth $30,000 from a deceased uncle on September 30, 2019 (6)Immediately after receiving this stock, Janice sold it for $30,000. This stock was originally purchased by his uncle on January 15th, 2016 for $23,000 Prepare the 2019 Federal income tax return for Janice Morgan. This is an individual assignment. It is required that you submit both the (1) tax return and a (2) brief explanation for each line item on the return.
Janice Morgan, age 24, is single and has no dependents. Janice works as an employee from Worldwide Publishing and also as a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her freelance writing business Writers Anonymous (self employed). Both Writers Anonymous and Janice operate on the cash basis. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6789.
Self Employed Information:
Income from sale of articles 75,000
Rent 13,500
Utilities 7,900
Supplies 1,800
Insurance (business liability) 5,000
Travel (assume fully deductible) 2,300
Meals (while on business travel) 600
Meals (while meeting with clients) 600 Country Club (Used to entertain clients) 4,000
Client entertainment expenses 1,000
Personal items:
Wages from Worldwide Publishing $110,000
Interest from checking account from First Bank 4,000
Home mortgage interest paid to First Bank 10,000 (Secured by principal residence, acquisition debt)
Home Equity Line of Credit 3,000 (Secured by principal residence, used to pay off credit cards)
Property taxes on personal residence 4,000
Charitable contributions 10,700
Federal income tax withholding 26,000
State income tax withheld 8,500
During the year, Janice invested $10,000 (tax basis and at-risk basis) into XYZ limited
During the year, Janice also invested $6,000 (tax basis and at-risk basis) into ABC limited partnership (a passive investment). Her share of the limited partnership loss for the year was $7,000, and Janice received a $1,500 distribution from ABC limited partnership.
In 2012 Janice started DEF Corporation (a small private C corporation) by contributing $40,000. She was the only owner. During the year Janice sold her complete investment for $30,000.
Additionally, Janice had:
(1)Janice made a $6,000 contribution to her traditional IRA account. Her employer, Worldwide publishing, offers a 401k that Janice contributes to.
(2)Sale of LMN publically traded stock on 8/15/2019 for $11,000 (originally purchased for $4,000 on 1/15/2015)
(3)Sale of QRS publically traded stock on 10/15/2019 for $2,000 (originally purchased for $6,000 on 12/15/2018)
(4)Sale of a boat on 5/15/2019 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2014)
(5)Janice inherited publically traded stock worth $30,000 from a deceased uncle on September 30, 2019
(6)Immediately after receiving this stock, Janice sold it for $30,000. This stock was originally purchased by his uncle on January 15th, 2016 for $23,000
Prepare the 2019 Federal income tax return for Janice Morgan. This is an individual assignment. It is required that you submit both the (1) tax return and a (2) brief explanation for each line item on the return.
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