Carson Case Study: Income Information

Carson Case Study Facts: Introduction

Interest Income

Select Quick Track > 1099-INT Interest.

OR

Select Source Documents (W-2, 1099s,1098) > 1099-INT/1099-OID.
Enter the following 2019 amounts. These interest items are owned jointly.

Norwest Bank$ 493

American Savings$ 289
Click First Interstate and press the Delete key to remove this line item from the Organizer screen.

Dividend Income

Select Quick Track > 1099-DIV Dividends.

OR

Select Source Documents (W-2, 1099s, 1098) > 1099-DIV.
Enter the following for New Dimension Fund:

Ordinary Dividends$ 118

Capital Gain Distributions $ 348
Select Add new 1099-DIV Payer.
Enter Hyte Fund and click OK.
Enter the following:

Ordinary Dividends$ 12

Total Capital Gain Distribution $ 276

The dividend income carries to Schedule B, and the capital gains distribution information carries to Schedule D.

Business Information

Marilyn Carson started a small business in 2019, which will be reported on Schedule C.

Select Quick Track > Business Income.

OR

Select Income > Business Income > Add new business name.
Enter Craftiques and click OK.

Craftiques is now listed under Business Income.
Click the Spouse radio button to indicate that this Schedule C belongs to Marilyn.
Enter the Business Address: 5473 W. Second Ave., Minneapolis, MN 55417.
Enter the Principal Business Code: 453220.
Verify under the Sch C Miscellaneous Info tab that the Accounting Method is Cash and the Inventory Valuation method is Cost.
Verify under Income Type that Marilyn Carson materially participates.
Verify the At Risk Information: All at risk.
Check under Miscellaneous Information that the business was acquired during the year.
To enter business income and expenses, click the Income/Expenses Detail tab at the top of this form.
Enter $ 19,150 Sale of Crafts for Gross Receipts or Sales Detail.
Click the Sch C Inc/Exp tab.
Enter the following:

Purchases less cost of items withdrawn for personal use $ 9,750

Inventory at end of year $ 2,975

Advertising $ 100

Insurance $ 550

Legal and professional services $ 400

Depreciation Information

The depreciation on the laptop that Marilyn Carson uses for her business should be entered on the Business Income part of the Organizer.

Select Depreciation and Amortization > Asset Detail > Add new Asset.
Enter Laptop Computer and click OK.
Enter the following asset information:

Date placed in service 04/15/2019

Cost $ 2,500

Method 5 year MACRS

Drop-down lists of alternative tax treatments facilitate entering assets for depreciation.

Leave the Life field blank. The system, by default, uses the 5-year life for 5 Year modified accelerated cost recovery property.
Since the laptop was used only 75% for business, scroll to the Business Percent and Salvage Value section.
Enter .75 in the Business use % if not 100% field.

The asset is over 50% business use. However, for this training return, guidance in selecting a Property Type option will not be provided.

Capital Gains and Losses

Select Quick Track > Capital Gains and Losses.

OR

Select Gains and Losses > Capital Gains and Losses > Add new Description of Property > Capital Gains and Losses.
Enter the following information: (Joint Ownership):
Date
Acquired Date
Sold Sales
Proceeds Cost
New Dimensions Fund 03/05/2012 08/01/2019 $1,204 $ 896
Hyte Fund 04/17/2010 09/15/2019 $1,586 $1,493
Various 12/05/2015 03/01/2019 $ 345 $ 427

	Date Acquired	Date Sold	Sales Proceeds	Cost
New Dimensions Fund	03/05/2012	08/01/2019	$1,204	$ 896
Hyte Fund	04/17/2010	09/15/2019	$1,586	$1,493
Various	12/05/2015	03/01/2019	$ 345	$ 427

Each activity has a folder for entering gains and losses that relate to that activity. For gains and losses that do not relate to a particular activity, enter them in the main Gains and Losses folder.

Case Study Facts/carson_income.htm/TY2019

Last Modified: 03/19/2020

Last System Build: 06/17/2021